Chancellor Rachel Reeves could be set to deliver a £4bn tax raid on pension perks targeting higher earners in the upcoming Budget. The Chancellor plans to limit tax breaks for salary sacrifice schemes, which allow workers to contribute to pensions before income tax and National Insurance. This change could cost the average worker £210 annually. Analysis by pensions consultants LCP suggests more than three million basic rate taxpayers could lose out if salary sacrifice was abolished. LCP partner Sir Steve Webb, a former Pensions Minister, said: "If it was abolished it would penalise the best employers and make it less attractive to offer decent pensions." Official figures suggest that more than three quarters of income tax relief on salary sacrifice goes to higher and additional rate payers.
