Pensioners and those figuring out their retirement plans might be right to feel anxious. None of the warning signs look good.
Previously, there was a limit on savings, most recently set at £1,073,100; anything above the limit was taxed at a top rate of 55 per cent. The lifetime allowance was officially scrapped in April 2024 to stop senior NHS doctors retiring early en masse.
More likely is Reeves not making any alterations to the stealth tax known as “fiscal drag”. The phrase suggests a cabaret act in full make-up and heels singing “I am What I Am”. Instead, it’s rather more tedious but equally worrying to retirees.
And those just below the higher rate are staring down the barrel of a tax on their private pensions and reduced tax breaks for savings, alongside a rise in capital gains tax.
But there’s not much sympathy from a second Labour MP, who told The i Paper: “Some pensioners are richer than they ever were, what’s to moan about?”
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“The triple lock is completely unhinged, no one would start from there,” a third Labour MP remarked.
“You’d need a cross-party consensus to change it, no one party could dare do it on their own,” a Whitehall source told The i Paper.
In Westminster you’ll often hear the phrase “Paul McCartney doesn’t need the winter fuel allowance”. Sometimes MPs use Mick Jagger instead. Some in the party see the very wealthiest retirees as fair game; Rayner knows she will have support among colleagues for her tax proposal.
It’s retirees who think they’ve done their bit, paid into the system and now want to go on a cruise or two. The winter fuel allowance convinced these voters that not only was the Government not on their side, but it might spring another unexpected stunt on them at some point in the future.
In a report released last month, the International Monetary Fund suggested that to ease the strain on public finances from an ageing global population, baby boomers should work longer.
The Chancellor is understood to want to stick to Labour’s election strategy of helping working people ahead of other groups. This will inform the Treasury’s thinking about which departments face the biggest squeeze next month at the spending review, and any tax changes in the late autumn.
Labour has already crossed pensioners and come off worse, although the public will likely give the Government credit for changing their minds over the winter fuel payment. But those coming up to retirement should brace themselves: the long-term forecast is changeable.
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