Ahead of the forthcoming Autumn Statement, David Hetherton, CEO of Walker Crips Wealth Management, comments.

Pensions have long been a target for Governments to use in tackling budget deficits, but this year we would strongly prefer it if the Chancellor left pensions untouched. However, there seems to be a growing consensus that the complex tax relief regime will be a focus for the new Chancellor.

There is continued speculation that the Chancellor will break the link between tax relief and the highest rate of income tax but, to achieve this, Phillip Hammond may introduce a single rate  of tax relief at 30 percent, or even a basic rate relief. But the most radical potential change is the introduction of a 100 percent tax relief rate minus one’s age – the implications of which would see a pensions saving pattern which is the polar opposite of the current industry standard.

Funding in later life and the redistribution of wealth would be significantly affected, as families able to afford funding for their children would be likely to take advantage of the scheme. This would benefit a small wealthy minority. However, in the real world a flat rate would serve the majority of savers, as most people avoid seriously focusing on their pensions until they reach middle age.