Spring Budget 2017: Pension freedom tax windfall for government

Five times 2015/16 forecast

Hannah Godfrey
clock • 2 min read

The government raised nearly five times more income tax than expected in the first year of pension freedom, documents released alongside the 2017 Spring Budget have revealed.

While HM Treasury was expecting an extra £0.3bn in tax in the 2015/16 tax year as a result of pension freedom, it ended up raising £1.5bn. The £1.1bn it now expects to raise this tax year is itself almost double the initial £0.6bn estimate. Just group communications director Stephen Lowe explained: "People have been taking far larger average withdrawals than originally expected, which has meant much more has been paid in income tax. Read more of our Spring Budget 2017 coverage here "It was expected that people taking lump sums out of pensions would spread them over four years - but...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Retirement

Advisers warn market volatility will threaten retirement plans

Advisers warn market volatility will threaten retirement plans

More than half expect clients to postpone or change plans

Isabel Baxter
clock 26 March 2024 • 2 min read
Perfect timing: How to advise clients on the right time to retire

Perfect timing: How to advise clients on the right time to retire

Striking a balance between health, wealth and personality

Richard Hulbert
clock 05 February 2024 • 4 min read
Baillie Gifford: Enjoying later life without an income from work

Baillie Gifford: Enjoying later life without an income from work

The latest from PA’ Digital Working Lunch webinar series

Professional Adviser
clock 12 December 2023 • 2 min read