Overview

• Speculation focuses on Chancellor Rachel Reeves targeting pension tax relief to help plug an estimated £50 billion fiscal gap, with the Treasury declining to confirm any measures.
• LCP highlights three options reportedly under consideration—abolishing higher‑rate relief, capping the 25% tax‑free lump sum, and curbing salary sacrifice—and warns of breaching Labour’s pledge on taxes for workers, disproportionate hits to public sector staff, and limited revenue this Parliament.
• The report says ending salary sacrifice would increase costs for employers and more than three million basic‑rate taxpayers, risking a setback to workplace pension saving.
• Official FCA data show £18.08 billion taken in tax‑free lump sums in 2024/25, up about 61% year‑on‑year, as advisers caution against knee‑jerk withdrawals based on Budget rumours.
• Pension pots are already due to fall within inheritance tax from April 2027, a change former pensions minister Ros Altmann calls almost unworkable, with advisers noting rising interest in Deeds of Variation; the Budget is scheduled for 26 November.