Chancellor Philip Hammond is expected to cut pension tax relief for thousands of the highest earners taxpayers to help pay for a proposed £20bn a year increase in NHS funding, according to the Daily Mail.
Around £38bn per year is spent on pension tax relief and Hammond intends to redistribute some of this money from ‘people who can afford to put tens of thousands of pounds into their schemes each year’ to the NHS, it states.
Following Theresa May’s promise to increase the NHS’s budget by 2023, Hammond has been tasked with finding the extra funds and has identified the money used for pension tax relief as one of the options available.
The pension tax relief money also hasn’t gone unnoticed by members of the pensions industry, with the Centre for Policy Studies proposing the government scrap the pension tax relief altogether to save the Treasury an estimated £10bn per year in a report yesterday, 27 August.
Hammond’s search has been eased by forecasts of a £10bn surplus this year, but in order to raise enough cash for May’s proposed budget increase the Treasury is also planning to increase alcohol spirit duties and remove tax breaks for investors investing in small companies.
A Treasury spokesman said: “We don’t comment on budget speculation.”