Will the high level of government spending during COVID lead to a raid on pension pots? — Hoxton Capital Management
1 min readJun 23, 2021
Will the high level of government spending during COVID lead to a raid on pension pots?
Plans laid out by the treasury to fill the hole left in public finances from their spending over the pandemic, include a number of changes that could lead to higher earners being substantially worse off in their retirements.
The three key reforms that are being considered are as follows:
Limiting tax relief on pension contributions to a flat rate of 30%.
Currently, tax relief is paid at a person’s marginal rate of income tax. This means that if your income tax rate is in the higher 2 brackets of 40% or 45%, you would see a reduction in the relief you receive on pension contributions by 10–15%.
However, the majority of people who are earning in the lower tax thresholds would stand to benefit from this change. For example:
Originally published at https://hoxtoncapital.com on June 23, 2021.
