George Osborne’s Budget will threaten workers' retirement funds with 55% stealth tax | WHAT REALLY HAPPENED

George Osborne’s Budget will threaten workers' retirement funds with 55% stealth tax

Analysts say proposals in Chancellor George Osborne’s Budget will hit not just the rich, but also those on more modest incomes.

Mr Osborne claimed a move to lower the “lifetime allowance” – the maximum that can be saved into a pension pot before a 55 per cent penal tax kicks in – from £1.25million to £1million, would affect “fewer than four per cent” of people. But experts argue that the allowance has now almost halved from £1.8million since 2010 and the tax will hit older savers who have built up their pension pots over many years.

Greg Kingston, of Suffolk Life, part of Legal & General, said: “Even a 21-year-old on the forthcoming higher minimum wage of £6.70 per hour who works a 35-hour week and puts 20 per cent of their earnings into a pension, by the time they are 67, could easily have reached this limit.”

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