- Home » Expat News » Pension tax relief billions could be up for grabs by future chancellors
Pension Tax Relief Billions Could Be Up For Grabs By Future Chancellors
Published: | 2 Mar at 6 PM |
Want to get involved?
Become a
Featured Expatand take our interview.
Become a
Local Expertand contribute articles.
Get in
touchtoday!
Is the pension tax relief top-up scheme safe from being looted by future British Chancellors of the Exchequer?
If you’re saving into a pension scheme with the intention of retiring overseas you’ll need to keep a close eye on government rule changes. The government’s pension tax relief scheme is made up of the money the government pays in to top-up pension contributions paid into personal and workplace retirement savings. Presently, it stands at £38.6 billion sterling, with some financial experts believing it’s a tempting honeypot for future chancellors looking to avert Brexit-related economic problems.
Over the past several years, financiers have forecast either a scrapping of the scheme or changing of the rules resulting in a reduction in the amount put aside, but the tax break has remained strong. Now the same financiers are asking how much longer it’s to be maintained in its present form. Indications of changes ahead were noted when the government cut the lifetime allowance of £1.8 million to one million, with the annual allowance cut to £40,000 for average savers and just £10,000 for high earners.
According to figures from HM Customs and Excise, pension contributions reached an all-time high of £24.6 billion during the 2016/17 tax year, an increase of £300,000 million on the previous tax year. Tax and pension analysts believe most would have thought the tax relief bill would increase as automatic enrolment is rolled out to employers and millions more workers, but the reduction of high earner incentives to save has somewhat stemmed the tide.
At the same time, HMRC figures show tax relief on self-employed pension contributions are now at a standstill of around £700 million, representing less than half their level during the 2007/2008 tax year. In addition, employers’ pension contributions national insurance exemption costs are increasing. The amount, separated from HMRC’s main interest relief calculations, now stands at £16.2 billion due to an exemption on auto-enrolled workplace pension contributions by employers. Whatever moves the government makes, those saving for a new life as expats need to carefully consider their alternatives.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
RECENT NEWS
Your Guide To Understanding Financial Jargon And The Market
The more uncertainty there is in global financial markets, it seems the more voices there are using complicated language... Read more
What Is A Provisional Assessment And What Are Its Pros And Cons?
In this article, Viviënne Wormsbecher from Blue Umbrella explains what a provisional assessment in the Netherlands look... Read more
Dealing With Micro-stressors When Moving To A New Country
Much is written and spoken about the large stressful changes you must deal with when moving to a new country, such as ho... Read more
Tokenisation: How To Digitalise Your Dutch Company
Looking to digitalise the assets from your Dutch company? Dennis Vermeulen from House of Companies defines tokenisation... Read more
The Ins And Outs Of Dutch Culture: Your Guide To Integration
In this guide from international moving company AGS Global Solutions Netherlands, they explore the essential tips for ad... Read more
Job Interviews In The Netherlands: A Guide For Internationals
Are you currently looking for a new job as an international in the Netherlands? The team from Undutchables presents this... Read more