Chancellor: £2000 cap on salary sacrifice into pensions

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Rachel Reeves says she is introducing a £2000 cap on worker's salary sacrifice into pensions, claiming that the cost to the taxpayer of pension salary sacrifice will reach £8 billion by the end of the decade. The Chancellor says the move will come into effect in 2029. Report by Ketchs. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn

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00:00The Government rightly provides generous tax relief for people paying into a pension, relieving

00:05income tax on all contributions and on the investment itself, as well as national insurance

00:11relief on employer contributions, at a cost of over £70 billion a year to the exchequer.

00:19This Budget makes no changes to those reliefs or to the tax-free lump sum.

00:25But salary sacrifice for pensions, which was intended to be a small part of our pension

00:30system, is forecast to almost treble in cost to other taxpayers from £2.8 billion in 2017

00:38to £8 billion by 2030, with the greatest benefit going to the highest earners or to those in

00:45the financial services sector putting their bonuses into pensions tax-free.

00:51While those on the minimum wage or those whose employers do not offer salary sacrifice do

00:55benefit at all, that is not sustainable for our public finances, putting pressure on the

01:01tax that everyone else pays.

01:03And so I am introducing a £2,000 cap on salary sacrifice into a pension, with contributions

01:10above that taxed in the same way as other employee pension contributions.

01:16That is a pragmatic step so that people, especially on low and middle incomes, can continue to use

01:22salary sacrifice for their pension without paying any more in tax than they do now.

01:27And so and to contribute to 1970.

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01:47publisher got the дня of charge as a pension comes up with everything.

01:50And, I mean, what I do NIH is not just in terms of computing because of the

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