Pension - 25% tax free lump sum

IssyHotten

anyone think that this might be removed, or even changed, in the near future? If so - when?

DE_612183

no idea - will have to wait for Labours first budget to see what they intend to do.

Mark_d

This has been around for as long as I remember.  I can't see Labour removing/changing it now

p00hsticks

Another thread that I suspect is likely to be closed or removed due to inviting pure speculation and political debate. 

HappyHarry

We see the same question at every election and every budget.

As always, it is very unlikely that it will be removed.

It is possible that the maximum tax-free limit (currently £268,275) could be changed. I doubt it is a priority to do so.

leosayer

If (a very big if) a future government was to make changes to this then I expect it will only affect future contributions / accruals to a pension. To do anything else would be politically challenging to say the least.

I certainly wouldn't let fears of change stop me making pension contributions.

It's worth noting that the tax free cash limit is a fixed amount so effectively reduces spending power thanks to inflation.  

Albermarle

IssyHotten said:

anyone think that this might be removed, or even changed, in the near future? If so - when?

It would be very unpopular, amongst all income groups with a pension. Therefore it is highly unlikely to happen.
Plus it would de incentivise saving into a pension, whilst governments of all types have so far encouraged people to save into a pension.

dunstonh

IssyHotten said:

anyone think that this might be removed, or even changed, in the near future? If so - when?

Rumours of its removal started in 1988.    You are coming up to nearly 40 years of rumours that it will be removed.  Yet, in that period, both Labour and the Conservatives increased the availability of tax-free cash overall.   There has been a soft cap on tax-free cash since 2006, and that cap has varied over the years.

It was hard capped at £268,275 by the Conservatives, and Labour has said they intend to maintain that.    

Tax free cash is a very small part of the overall cost to the treasury with pensions.   Removal would harm the economy, cause hardship to those with low income/savings (people using it to clear debts) and would be politically damaging.     There are far easier targets.

Hoenir

Bad enough with the endless speculative threads around budget time.  Another 3 months or so before anything gets said officially. Is going to get tiresome.