Andy James, head of retirement planning at Tilney, comments on the HMRC's estimated cost of pension tax relief reaching £41bn

23 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.” 

About Tilney

Tilney is a leading investment and financial planning firm that builds on a heritage of more than 150 years. The Tilney Group operates under the Tilney brand for Investment Management and Financial Planning and Bestinvest for execution-only investing. We look after more than £22 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including Best Fund Platform and Best SIPP Provider at the 2017 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. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Group employs over 1,000 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.