Advisers favour social care changes over pension tax reform

Advisers believe social care funding should be prioritised over pension tax reform in the upcoming Budget, according to Aegon.

Its study found that more than a quarter (27 per cent) of financial advisers saw changes to pension tax relief as the top priority.

However, it also revealed that 39 per cent saw a new deal on social care funding as their number one priority.

Almost a fifth (18 per cent) hoped most that Rishi Sunak’s first budget would include a pension solution for the self-employed, while just 4 per cent of advisers cited extending auto-enrolment as their top concern.

According to the Financial Times, former Chancellor Sajid Javid had been considering cutting tax relief on pension contributions for those earning £50,000 or more per year from 40 per cent to 20 per cent as part of the upcoming budget.

In the current system, pension savers receive tax relief at the same rate as their income tax rate.

Aegon pensions director, Steven Cameron, said: “If new chancellor Rishi Sunak’s budget is to truly set out plans for a ‘decade of renewal’, it should be used to announce bold reform and put some meat on the bones of manifesto promises.

“With Brexit now at least on the way to being ‘done’, and with our population living longer, now is the time to tackle the UK’s biggest challenges in pensions and social care funding. So what policies do advisers want to see emerge from the Chancellor’s red box on budget day?”

Cameron commented that it was unsurprising to see social care as the top issue as it “affects millions of individuals”, adding that “the adviser community has made it clear how much of a priority it is for them and their clients, so we now need to see government progress to ‘get social care done’”.

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