Hammond's dividend tax leaves '90,000 investors' worse off

Many retirees affected

Hannah Godfrey
clock • 2 min read

About 90,000 investors are set to lose out as a result of Hammond's changes to the dividend tax allowance outlined in the Budget, many of whom are pensioners, according to data from The Share Centre.

The retail stockbroker said the changes will typically affect investors with portfolios valued at more than £50,000 (assuming a 4% yield, a portfolio size of £50,000 would generate dividend income of £2,000). It added an "unintended consequence" of the change could be that it penalises those using dividends to fund their retirement. In the 2017 spring Budget, Chancellor Philip Hammond cut the dividend tax allowance from £5,000 to £2,000 with the reduction set to take effect from April 2018. The government said the move - alongside the now scrapped proposals to increase Class 4 Nati...

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

Watch PA's Working Lunch with L&G: Navigating the new landscape of retirement solutions

Watch PA's Working Lunch with L&G: Navigating the new landscape of retirement solutions

Catch up on the discussion

Professional Adviser
clock 09 April 2026 • 1 min read
The changing nature of retirement planning

The changing nature of retirement planning

Retirement planning conversations must 'evolve'

Lorna Shah
clock 02 April 2026 • 4 min read
The advice dividend in an age of retirement uncertainty

The advice dividend in an age of retirement uncertainty

The UK pensions landscape has become progressively more complicated in recent decades

Andrew Tully
clock 17 February 2026 • 4 min read