The parliamentary petition calls for pension tax lock
A new petition is calling on government to make a public commitment to a Pension Tax Lock, pledging not to alter key pension tax incentives – tax-free cash entitlement and tax relief – for at least this Parliament.
The parliamentary petition has been launched by AJ Bell, which hopes to end damaging speculation over the future of pension tax-free cash and tax relief.
Signatories can participate by adding their name to the petition here, with 10,000 signatures forcing a government response. The petition has already attracted over 2,500 signatures.
Tom Selby, director of public policy at AJ Bell, said: “When people save in a pension they enter into a tax pact with the government. Take home pay today is sacrificed for the long-term, on the proviso that it will instead be taxed on withdrawal and comes with the added benefit of a 25% tax-free element.
“That is the foundation upon which the retirement plans of millions of Brits are built and requires a firm commitment to stability from government, matching the long-term financial decisions of savers making preparations for retirement.”
He said individuals contribute to a pension in good faith and should not be subject to endless speculation government may move the goalposts before they access their money.
He said committing to a Pension Tax Lock would show government is serious about a fair deal for workers, allowing today’s savers to enjoy the same pension tax incentives as their parents.
He added: “It would also lay down the gauntlet to any future government tempted by a pension tax raid, offering genuine security to savers through a policy commitment that doesn’t require any increase in government spending.”
Mr Selby said the economy should benefit too, as more stability in the pensions system should give people confidence to boost their contributions – a large chunk of which will be invested in UK business.
Mr Selby said: “For an administration struggling desperately in the opinion polls a policy such as this, with appeal to older and younger voters alike, should be a no-brainer.”
The petition, registered on 1 October, can be found here.
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