Could the Budget be a Hit for Older Workers – but not as expected?
Things are not looking good for both older savers and workers, with a rumoured hit planned in next months budget , proposals on the table include slashing tax relief on pensions for older workers in order to pay for lower taxes for the young.
With one budget a year, a lot is now riding on Philip Hammond’s budget on November 22nd.
More and people are now working beyond retirement age through necessity, bringing with them a wealth of experience and wanting to make a contribution to the workplace, but there is also a large section working in an attempt to build up a reasonable pension.
Recent statistics say more than one million of Britain’s pensioners are now in employment, but they could be the ones about to be hit by the forthcoming budget.
The Chancellor of the Exchequer is understood to be examining ways to link tax to age to promote “intergenerational fairness” next month.
Tax breaks would be offered to workers in their 20s and 30s, paid for by cutting reliefs for older and better off workers.
It’s a known fact, recently covered in an ITV documentary ‘Work Til You Drop’ that many people are ill prepared for their later years. In Holland it’s common for people to save 20% of their salary for their retirement. Here in the UK, latest figures from Prudential show nearly one in seven workers retiring this year have made no other financial provisions for life after work and will be relying solely on their state pension to survive.
“One thing older workers and savers could to do is to maximise their annual pension contributions before they are hit with reduced tax relief,” said financial adviser, Simon Taylor.
“Unused tax allowance can be carried forward going back three years - plus the current year, and in this way before the November budget really does hit home, people can make a significant tax efficient saving, I would urge anyone in this position to call me.
“This is a must do especially for the self-employed,” warned Simon.
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