Phillip Hammond should simplify pensions, axe the triple lock and abandon the pension relief taper, says Thomas Miller Investment.

Little action is anticipated in the area of pensions and savings at the first major Government Budgetary announcement since the EU referendum, but Matthew Phillips, managing director, at Thomas Miller has a wish list on that front.

He said: “We continue to espouse that pensions should be simplified further (flat rate tax relief, abandon the life-time allowance, and have annual limits on contributions).

“The pension triple lock should be abandoned as it has done its job of addressing pensioner poverty and should be replaced with uplifts in line with average wages for the state pension. This should address some of the issues around intergenerational fairness and free up some future budget to help working families.

“We would like to see the tapering of pension’s relief abandoned. It is totally unworkable and overly complex, and again sends out the wrong message on pensions.”

Tony Wickenden, joint managing director of Technical Connection, a St. James’s Place group company, said: “Assuming that we do not see the introduction of the radical ‘age related relief’, a flat rate of relief would carry a strong redistributive message aligned to the new government’s tone.

“A rate of 30% would see the tax benefit in relation to contributions reduced by 25% for higher rate taxpayers and the benefit to basic rate taxpayers increased by 50%.

“Over time a move to this kind of (higher than basic rate) flat rate relief would probably not save much money and, depending on the success of the measure (and auto enrolment) in changing the pension savings habits of basic rate taxpayers, may actually increase the overall cost of tax relief to the government.”

Andy James, head of retirement planning at Towry, said a flat rate pension tax relief would be easier to understand and arguably fairer on the plus side, but on as a minus it may further disengage higher earners from pension saving as it is not as attractive as the current system.