Boris Johnson will create pension tax relief 'losers' with mooted income tax reforms

£80,000 threshold

clock • 1 min read

Boris Johnson's mooted income tax reforms would create a double-edged sword whereby income tax winners would become pension tax relief losers, according to research by Aegon.

Prior to his appointment as prime minister, Johnson proposed increasing the higher-rate tax threshold from £50,000 to £80,000, meaning those earning within this wage would be ‘winners' by not paying as much income tax. However, Aegon revealed pension savers earning within this range would also lose their higher-rate pension tax relief, leaving them receiving basic rate relief instead. The firm noted that, if savers decided to reduce their pension contributions in order to keep tax charges unchanged, they could then face a 25% comparative drop in the value of their pension pot when the...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

IHT shake-up: What will come of SSAS discretionary death benefits?

IHT shake-up: What will come of SSAS discretionary death benefits?

'Essential that issues are addressed and rectified in the draft rules'

Caitlin Southall
clock 17 February 2025 • 4 min read
WBR Group acquires £403m SSAS book from Standard Life

WBR Group acquires £403m SSAS book from Standard Life

Administered SL's SSAS book for more than 20 years

Jenna Brown
clock 13 February 2025 • 1 min read
'Strong case' for automatic consolidation of small pensions, IFS argues

'Strong case' for automatic consolidation of small pensions, IFS argues

Think tank calls on the government to ‘end and reverse’ the proliferation of small pots

Holly Roach
clock 12 February 2025 • 4 min read