Stuart Trow, Columnist

Benefit From Those UK Pension Changes While You Can

Labour has pledged to scrap Jeremy Hunt’s pension allowance reforms, making long-term strategizing even more difficult.

March 20, 2023 at 5:00 AM UTC

Stuart Trow is co-host of “Money, Money, Money” on Switch Radio and author of “The Bluffer’s Guide to Economics.” Previously, he was a strategist at the European Bank for Reconstruction and Development.

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Photographer: Carl Court/Getty Images Europe

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Providing tax relief to incentivize retirement saving is a laudable, though phenomenally expensive, undertaking. In 2020-2021 alone, it cost the UK government a net £48.2 billion ($58 billion).

On top of that, while those who pay higher-rate income tax at either 40% or 45% make up just 18% of taxpayers, they receive 58% of the income and National Insurance relief. Clumsy attempts to target that disproportionate support since 2006 may seem fair, but they have also sowed confusion and led to highly skilled and experienced workers retiring early to avoid eye-watering charges.