Andy James, head of retirement planning at Tilney, comments on the HMRC's estimated cost of pension tax relief reaching £41bn23 January 2018
“The HMRC has today announced an update in its forecast on the cost of pensions tax relief for employers, which is now shown to be £950m higher than previously estimated. This is not actually a huge surprise as tax relief costs are only going one way at the moment – up!
“Auto-enrolment increases which have been geared in for the next two years will also increase pension contributions and therefore tax relief. Ideally, the government would keep control of these costs, but their ability to do so at the moment is hampered by their lack of majority and the focus on Brexit.
“The last Budget was the first of this Parliament, when you might have expected any ‘bad news’ to be factored in. However, there was nothing on pensions tax relief, so it remains to be seen whether the Chancellor is willing to allow the increasing impact on the Exchequer for the rest of the Parliamentary term. However, with vocal calls for more cash urgently for both the NHS and the armed services, this issue could be revisited.
“Irrespective of this, a change in government could throw a spanner in the works, as the current Labour leadership is clearly enthusiastic about the idea of wealth taxes. Therefore the current system of tax reliefs – especially those that favour higher tax payers – should not be taken for granted and those able to benefit should utilise these reliefs where they can.”
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.