New Chancellor can play ‘key role’ in shaping pension policy; Glen resigns

Aegon pensions director, Steven Cameron, has highlighted the key role that Chancellor, Nadhim Zahawi, can play in shaping pension policy, following his appointment after the resignation of Rishi Sunak.

Sunak resigned from his role last night (5 July), stating that the public rightly expect the government to be conducted properly, competently and seriously, and he resigned as he felt those standards “are worth fighting for”.

He added that it had become clear that his and Prime Minister, Boris Johnson’s, approaches on the economy were “fundamentally too different”.

Sunak is succeeded by former Education Secretary, Nadhim Zahawi, who inherits a landscape of high inflation and a cost-of-living crisis.

Commenting on his appointment, Cameron highlighted the key role that the Chancellor plays in moulding pension policy.

“While people might think pensions policy is set solely by the Department for Work and Pensions, the Treasury has great influence, particularly around how the tax system supports pensions,” he stated.

“This includes the valuable tax relief top ups on contributions and the limits on how much can be saved. Remember, it was former Chancellor, George Osborne, who brought in pension freedoms, radically reforming how people can now access their pension flexibly.

“One of the most contentious pension measures Rishi Sunak introduced was freezing the lifetime allowance, the maximum you can build up in your pension without a tax penalty, until 2026. With inflation skyrocketing, more and more people are being dragged into facing this tax charge and now may be the time to unfreeze this measure.

“While Nadhim Zahawi will have many other more pressing priorities, we hope his appointment creates an opportunity to make sure pensions tax policy is truly fit for the current environment.”

Economic Secretary to the Treasury, John Glen, has also resigned.

Having served under three Chancellors, Glen said that he can “no longer reconcile my commitment to the role and the financial services sector with the complete lack of confidence I have in your [Johnson’s] continuing leadership of our country”.

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