Higher rate taxpayers face pension pot 'dent' under rumoured 25% flat rate relief

Basic rate taxpayers better off

clock • 2 min read

A new 25% flat rate on pensions tax relief would create a “big dent” in the pension pots of higher rate and additional rate taxpayers if it goes ahead, Aegon warns.

There are rumours that Chancellor Rishi Sunak is planning on reforming pensions tax relief so everyone receives a flat rate of 25%. If this happens, basic rate taxpayers will be better off while higher rate taxpayers could see their pension funds dip. Aegon pensions director Steven Cameron said: "This is seen by many as a fairer way of sharing this government incentive across people of all earnings bands but would also likely produce a cost-saving for the Treasury. "It would be good news for basic rate taxpayers who'd receive a more generous bonus but would create a big dent in the fu...

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