Connect with us

Hi, what are you looking for?

Right Decision NowRight Decision Now

Business

Will UK Budget in March spark pension exodus?

UK pension holders will increasingly be seeking to move retirement funds overseas as fears grow about the Budget in March, predicts the Investment Director of one of the world’s largest independent financial advisory, asset management and fintech organisations.

The warning from James Green of deVere Group comes ahead of Chancellor Jeremy Hunt delivering the first formal UK Budget since 2021 on March 15.

The last official Budget was presented in October 2021 by Prime Minister Rishi Sunak, when he was Chancellor. Since then, a “series of panicked fiscal statements” have been issued by the Treasury.

James Green says: “The UK is facing at least a decade of lost economic growth amid the readjustment to a post-Brexit era; a weak post-pandemic recovery; a shrinking, ageing and ailing population; a continuing cost of living crisis; and falling productivity and private sector investment.

“As the UK falls to the bottom of the G7 nations in terms of quarterly economic growth, the country’s tax take inevitably falls too – and this is of serious concern for UK pension holders.”

He continues: “With the UK economic crisis escalating and an urgent need to plug the financial hole, it can be reasonably assumed that the government will consider tapping into the billions held in retirement savings.

“Successive governments have shown that they see Britons’ pensions as easy ‘low-hanging fruit’ they can raid or tweak whenever they deem it appropriate. This is unlikely to have changed, especially in light of the scale of the issue.

“Using the inflation line, we expect that the government will over time and starting in the Budget, begin to roll out freezes of allowances, benefits and thresholds, and potentially taxes on pension payouts.”

To mitigate the hit to retirement funds that could be announced in March by the Chancellor, James Green believes that UK pension holders will increasingly be seeking to move their retirement funds overseas “to protect their nest eggs.”

When retirement funds are transferred overseas into a pension scheme based outside the UK, but that still meets HM Revenue & Customs (HMRC) rules, they are not typically subject to inheritance or income tax in the UK.

In addition, after paying initial tax on the transfer, pension holders can often benefit from a much lower tax rate, amongst other benefits.

The deVere Investment Director concludes: “It’s a difficult move politically to go after pensions as the Conservatives typically do well from older voters, but the Treasury needs to bolster the coffers.”

Read more:
Will UK Budget in March spark pension exodus?

    You May Also Like

    Business

    The head of the International Monetary Fund has warned of increased risks to the stability of the financial system after weeks of banking sector...

    Business

    The Home Office has made next to no progress in tackling criminal fraud during the past five years, despite it having become Britain’s most...

    Business

    Mark Zuckerberg has laid off more than 11,000 Meta’s employees, about 13 per cent of its global workforce, in what he described as “some...

    Business

    1.22 billion people use Instagram every month. That’s a huge number of Instagrammers trying to hit it big on the platform all at the...

    Disclaimer: rightdecisionnow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 rightdecisionnow.com | All Rights Reserved