page-banner

Pension tax
relief, the new Chancellor and the 2020 Budget

Policy papers

summary image

The Conservative manifesto promised to tackle issues around NHS doctors facing large tax bills and some low paid workers missing out on pension tax breaks.

With a Conservative Prime Minister now in command of a large parliamentary majority, this paper looks at what options the government has to reform pension tax relief and what avenues they might explore in the upcoming Budget and beyond.

Key findings include:

  • Introducing a single ‘flat rate’ of pension tax relief would be a highly complex reform which would require consultation on the details and could not be implemented quickly. 
  • If the March 2020 Budget floated major cuts to tax relief to be implemented in future years, this could lead to people seeking to ‘max out’ on pension saving ahead of any change.
  • The new Chancellor has a variety of options for delivering on the manifesto pledge to tackle issues around higher earners and limits on pension tax relief, in particular the tapered annual allowance.

To read our post Budget analysis, see our special Budget Bulletin and blog on the Annual Allowance changes that were announced. 

What's on point?

LCP’s on point papers delve behind the headlines of topical issues and news on the pensions and finance agenda. Our experts give their insight and analysis on a variety of topics, shining a light on potential policy responses, outcomes and solutions.  

Download PDF

How we can help

We help sponsors of pension schemes understand and manage the costs and risks associated with supporting their current and legacy pension schemes as well as other employee benefits.

Our tax tools help you communicate the latest tax changes to your employees in a straightforward way.

We help pension scheme trustees and sponsors to determine the ultimate destination for their scheme and help them put together a plan to get there, including how to effectively manage the risks they face along the way.

We help trustees achieve their strategic goals, with solution-led, appropriate advice.

Pension Schemes Bill

Pension Schemes Bill

Insight hub

Keep up to date with the Pension Schemes Bill and TPR's funding consultation. What does this mean for sponsors and trustees?

Enter the hub