Chancellor Rachel Reeves is planning a significant intervention in the UK's pension landscape, targeting popular 'salary-sacrifice' arrangements used by millions of private-sector workers. The move, expected to be unveiled in Wednesday's Budget, is an attempt to raise approximately £3 billion for the Treasury.
A Hammer Blow for Private Pensions
This planned overhaul has drawn immediate comparisons to the controversial pensions raid executed by former Labour Chancellor Gordon Brown. Financial experts have issued stark warnings, suggesting the policy would deal a hammer blow to private-sector pensions. They highlight that these private arrangements already lag significantly behind the gold-plated, defined-benefit schemes typically available to public sector employees.
Funding a Social Policy Shift
The estimated £3 billion raised from the pension changes is poised to fund a major social policy shift. It is understood that Ms Reeves is also expected to scrap the two-child benefit cap, a measure that would itself cost around £3 billion a year. In a further boost for recipients, social security handouts are anticipated to be uprated by nearly 4 per cent from April.
Ahead of the official Budget reveal, the Daily Mail is running a poll asking readers whether they believe the pension changes should be used to fund the benefit cap removal. This follows a weekend poll on the BBC licence fee, where an overwhelming 94 per cent of more than 21,000 respondents voted 'no' to the compulsory charge, with just 6 per cent in favour.
