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Tue, 24 November 2020

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Tory rebels hit out at Philip Hammond’s plan to target pension pots in Budget

Tory rebels hit out at Philip Hammond’s plan to target pension pots in Budget
2 min read

Philip Hammond has been warned his plans to raise taxes in the Budget could be voted down by Tory rebels.


The Chancellor yesterday all-but confirmed he will target tax breaks for pension-saving because they had become “eye-wateringly expensive”.

Mr Hammond is under massive pressure to find money to pay for a £20bn boost for the NHS, and to make good on Theresa May's Tory conference pledge that austerity is "over".

But his comments prompted a furious backlash from Tory MPs, who said the move would put people off putting money aside for their futures.

Jacob Rees-Mogg told The Times: "This type of chatter before each Budget causes people to be nervous that they won’t be able to do the pensions savings that they’ve been told they can do, and therefore generally discourages the savings culture.

"Anyone who’s contemplating putting money into a pension thinks: the Government says that’s what it is today, but it could change next week, therefore I won’t bother, I’ll spend the money now."

Bernard Jenkin, another Tory MP, said: "This is a very haphazard and unstrategic way of planning pension provision and it will mean that even less is saved into pensions than now. I hope the Government will think very carefully and more deeply about how we want to encourage people to save for their pensions."

The Government already faces a major challenge in getting its Finance Bill through Parliament, with the DUP threatening to vote against it in protest at Theresa May's Brexit strategy.

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