The head of one of Britain’s largest pension firms has criticized proposed plans to target pension savings. Antonio Simoes, the chief executive of Legal & General, warned that such moves could deter people from saving for retirement. Simoes emphasized the need for “stability” to encourage long-term savings.
He said consistent changes to pension rules would undermine public confidence in saving for the future. “We need people to be investing more for their retirement – and if you keep on changing the incentives, there’s no stability,” Simoes said. One suggested measure to address the “£22 billion black hole” in public finances is to reduce the level of tax relief on pension contributions for higher-rate taxpayers.
Simoes did not specify which policies he preferred, but he stressed the need for a stable and incentivized savings environment.
Pension stability concerns
Legal & General manages over £1 trillion in assets, including the pensions of more than 5.3 million people in the UK, valued collectively at around £146 billion.
Simoes highlighted the importance of using these funds productively within the economy. Other pension firm executives, including Amanda Blanc of Aviva, have also cautioned against changes to pension tax relief. Blanc urged ministers to carefully consider the implications of such policy shifts.
The Institute for Fiscal Studies (IFS) has weighed in on the debate as well. It suggested a £2 billion raid on wealthy savers’ pension pots by reducing the tax-free lump sum that can be withdrawn. The IFS also proposed subjecting pensions to inheritance tax and levying National Insurance on employer contributions to pensions.
However, the IFS warned against reducing income tax relief on pension contributions for higher-rate earners, calling this approach “damaging, complex, and inequitable.”
As the October budget approaches, the debate over the future of pension savings and the best approach to securing economic stability continues to intensify.
- GBNews.”City boss attacks Rachel Reeves’s plans to target pensions – ‘We need STABILITY!'”.
- Telegraph.”NHS doctors threaten to quit over Labour pension tax raid fears”.
- GBNews.”REVEALED: Why Rachel Reeves WON’T target the tax-free pension lump sum in next month’s Budget”.