Looting Britain’s pensions will stop workers from saving and leave them reliant on the state, Aviva boss Reeves warns
Aviva boss Amanda Blanc has raised the alarm over a potential Labour raid on pension savers, calling on the government to pay attention to the long-term consequences.
Chancellor of the Exchequer Rachel Reeves has warned she faces tough choices in her first Budget in October after uncovering a £22bn hole in the public finances that she says has been left by the Tories.
This has led to speculation about tax raids, including reducing pension deductions for high-income earners.
However, Blanc warned as Aviva published its half-year results that Reeves should think twice before doing so.
Hands off: Aviva boss Amanda Blanc warned Finance Minister Rachel Reeves should think twice before plundering workers’ pensions
She stressed the importance of encouraging workers to save for pensions – of which Aviva is a major provider – so that they are less reliant on the state.
She added that increasing the pension savings account also means more money for investment in the UK.
Blanc said: ‘On pension tax relief, the main thing we need to point out is that if you really want people to save for the long term, pensions are a long-term game. It’s not something you do today that doesn’t have an impact in five, 10, 15, 20 years’ time.
“We just want to say that the government is thinking about the long-term consequences.”
Officials are working on a change to the tax benefit for people who contribute money to their pension fund.
Workers will receive 20 percent relief for those on the basic rate and 40 or 45 percent for those on the higher rate. Speculation suggests Reeves could limit relief for people in the 40 and 45 percent brackets.
Analysis by AJ Bell shows that millions of savers with a higher interest rate will have to save an extra four years to get their pension pot to the same level.
It is one of many moves in the planning.
Reeves has also hinted that she could raise capital gains tax. Another option could be to increase fuel duty. However, Blanc was more positive about the broader outlook for the UK.
“There are many reasons to be positive, including greater economic stability and political certainty,” she said.
‘We’ve spoken to investors all over the world and the feedback we’ve gotten is that they’re much more interested in the UK now than they were two years ago.
‘We must be optimistic about the future of the United Kingdom.’
Blanc said the recent riots haven’t hurt that sentiment. “The fundamentals are actually very strong,” she said.
Aviva reported a 14 percent rise in operating profit to £875 million, beating analysts’ expectations of £830 million.
Blanc announced it would launch a long-term fund for unlisted growth companies in the second half of this year.
Analysts at broker Jefferies said: ‘Aviva continues to deliver a strong performance against targets.’ The shares rose 0.7 per cent, or 3.2p, to 491.8p and are up 13 per cent this year.
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