NATOPotato - sadly various Governments have agreed to
rob tax our pension arrangements over the years. In 2006 LTA was £1.5M and so it didn’t affect most of us (apart from CDS), then by 2011/12 it was up to £1.8M before the gradual reductions happened. It was only really when it got to about £1.25M that any of us started noticing in 2014/15. Now it reduced to £1M in 2016/17 and then went up with inflation to £1.073M by 2020/21 and then it was frozen. Now with eye-watering inflation it is really starting to bite.
There are many reasons for this
grab taxation of pension - economic challenges from the 2007 crash, “Austerity”, Brexit, COVID, Russia vs Ukraine, etc… etc… But the bottom line is that it affects a small, say 3-5% of the population, and so most politicians don’t care right now. I think that is starting to shift as they are seeing more people quit their well-paid jobs (inducing a “brain drain”) that is starting to see fewer, Doctors, Judges, Lawyers, VSOs, high-end Civil Servants all starting to quit early. When the wheels start to come off of the wagons that these folks support, just maybe then we’ll see the politician’s and HMT’s ears starting to prick up.
But until that happens, if it does, then we just have to suck it up…
