The chancellor insisted on ruling out another pension tax raid

  • Rachel Reeves tries to plug holes in the country’s finances
  • New pensions minister Torsten Bell has called for major reforms

Rachel Reeves has been urged to rule out another tax attack on pension pots following the appointment of a Pensions Secretary who has called for major reforms.

Following Torsten Bell’s promotion to the job, industry experts want guarantees from the Chancellor that pension savings will not be targeted as she looks to plug a hole in the country’s finances.

Bell, the former head of the left-wing Resolution Foundation, has in the past called for “complete reform” of the pension tax credit, a measure that would affect millions of middle-class workers.

He has also called for a sharp reduction in the amount people can take out of their pension pot tax-free, from £268,275 to just £40,000.

Bell is a former adviser to Ed Miliband and best known for masterminding the disastrous ‘Ed Stone’ stunt, in which the then Labor leader commissioned a slab of limestone with his promises carved into it.

His appointment as Pensions Secretary has led to speculation that Reeves could tackle pensions again in a ‘mini-budget’ in March, after dragging them into inheritance tax for the first time in October’s budget.

Concerns: Torsten Bell’s appointment as Pensions Secretary has led to speculation that Rachel Reeves could hit pensions again in March in a ‘mini-Budget’

There are fears that talk of cutting the tax-free lump sum would be particularly damaging as savers rush to withdraw money from their pension pots – as they did before the last Budget. Experts have warned that this will leave many worse off when they retire.

Helen Morrissey, head of pensions analysis at Hargreaves Lansdown, said: ‘We have seen the damage speculation can do when people rush to withdraw their tax-free money ahead of the recent Budget only to discover no changes have been made. It’s not a situation anyone wants to see repeated.

‘People need the certainty to plan for the future without worrying about their efforts being undone by changes further down the line.’

Pensions and savings investment platform AJ Bell called on the Chancellor to agree to a ‘Pensions Tax Lock’ to take any changes ‘off the table for the rest of this Parliament’.

Rachel Vahey, head of public policy at AJ Bell, said: “The Chancellor must nip the specter of damaging rumors and speculation in the bud.”

However, the Ministry of Finance has refused to rule out a new tax attack on pensions.

Former Pensions Minister Baroness Altmann told the Mail this week that ‘private and state pensions are under attack’.

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