Spring Budget 2017: Pension freedom tax windfall for government

Five times 2015/16 forecast

Hannah Godfrey
clock • 2 min read

The government raised nearly five times more income tax than expected in the first year of pension freedom, documents released alongside the 2017 Spring Budget have revealed.

While HM Treasury was expecting an extra £0.3bn in tax in the 2015/16 tax year as a result of pension freedom, it ended up raising £1.5bn. The £1.1bn it now expects to raise this tax year is itself almost double the initial £0.6bn estimate. Just group communications director Stephen Lowe explained: "People have been taking far larger average withdrawals than originally expected, which has meant much more has been paid in income tax. Read more of our Spring Budget 2017 coverage here "It was expected that people taking lump sums out of pensions would spread them over four years - but...

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