Jeremy Hunt handed a huge pensions giveaway to the wealthiest 1% to help stem the tide of people leaving the workforce, in a budget designed to reboot Britain’s faltering economy with business investment incentives and childcare support.
In an attempt to keep older skilled workers from retiring early, Hunt announced his only big surprise of the budget – to scrap the £1m cap on tax-free pension savings, saying: “No one should be pushed out of the workforce for tax reasons.”
The chancellor claimed his “budget for growth” would address Britain’s two big structural economic weaknesses – a lack of investment and a shortage of workers – but the most eye-catching measure was the pension boost for the top 1% of earners.
Someone with a £2m pension pot will get a tax cut of £275,000 when they take their tax-free lump sum as a result of the change.
The Labour leader, Keir Starmer, attacked the move, questioning how it could “possibly be a priority for this government”, while other critics noted Hunt’s statement said nothing about public sector pay.
Torsten Bell, chief executive of the Resolution Foundation thinktank, said the chancellor had “basically ignored” public services, leaving them facing “implausibly tight spending plans”. Bell added that it means “rich people now have no overall limit on how much can be put into their pension pots tax-free”, and can pass this on to their heirs with “absolutely zero inheritance tax”.
“The more you think about this policy the worse it is,” he said.
Hunt, however, insisted the British economy was “proving the doubters wrong” and would narrowly avoid a technical recession in 2023, as he set out £22bn of higher spending and tax breaks in the next financial year.
His giveaway reversed only part of theRead more on theguardian.com