Occupational Pensions: Tax Relief

Mr Peter Bedford (Mid Leicestershire) (Con) asked the Chancellor of the Exchequer, Rachel Reeves, what assessment she has made of the adequacy of the level of tax relief for occupational pension contributions. In her response, the Chancellor acknowledged the importance of encouraging savings to ensure decent incomes in retirement, and welcomed the cross-party support for automatic enrolment, which has resulted in 11 million more people saving. She stated that the government has launched a pensions review to ensure that money set aside for retirement is working for both pensioners and the UK economy. The Chancellor reminded the House that tax announcements will be made in the upcoming Budget on 30 October, alongside an independent forecast from the Office for Budget Responsibility, and that this will be a Budget to fix the foundations, rebuild Britain, and ensure that working people are better off. Mr Bedford followed up, asking the government to recognise the importance of workers saving for their later years, and whether any moves to reduce the 25% tax-free drawdown or reductions in tax relief on pension contributions would be a disincentive and lead to more pensioner poverty. The Chancellor acknowledged that for many people, the money saved for retirement is not enough, and stated that the government believes the reforms they seek to introduce through the pensions review could increase pension pots by £11,000. She said the Secretary of State for Work and Pensions is leading the review to ensure pensioners receive a good deal in retirement and that those who work hard to save have a decent return on their investment. Nigel Huddleston (Droitwich and Evesham) (Con) then congratulated the Chancellor and the Treasury team on their appointments, and stated that it is now the opposition's job to hold them to account. He asked the Chancellor to confirm that the government will not increase taxes on pensions in the upcoming Budget, given Labour's election promise not to increase taxes on working people. The Chancellor did not speculate on the contents of the upcoming Budget, but reiterated her determination to ensure that working people are better off. She stated that under the last government, the tax burden reached its highest level for 70 years, and ordinary working people paid the price for that. She said this Budget will be to fix the foundations of the economy, rebuild Britain, and make working people better off.