Pensions Minister Torsten Bell has refused to rule out possible new taxes on pensioners in the upcoming Budget, despite growing concerns that the Government may cut the tax-free lump sum retirees can withdraw.
Speaking at an event in London, Bell praised last year’s tax rises on wealth and the middle class as difficult but fair choices, arguing they were needed to fix what he described as Britain’s economic doom loop.
When asked directly about potential new taxes on pension income, he said: “I am not going to start commenting on budgets.”
Bell, a former head of the Resolution Foundation think tank, recently took on a key role in preparing Chancellor Rachel Reeves’s Budget.
In the past, he has supported major pension reforms, including reducing the tax-free lump sum and ending the triple lock on pensions.
Reports last month suggested Reeves is considering cutting the amount retirees can take tax-free to raise revenue. While Mr Bell dismissed some of those claims as nonsense, he also defended the Government’s record of raising taxes on inheritance, capital gains, non-doms, private jets, and private schools to fund the NHS and policing.
Economists estimate the Chancellor needs to find between £20bn and £50bn to repair public finances, with debt now standing at £2.9 trillion.
Bell also described the current pension system, introduced by Conservatives, as mad, arguing that savers are forced to guess their lifespan when deciding how much they can spend.
He pointed to Australia’s experience, where pensioners often underspend out of fear of running out of money.
