L&G boss tells Chancellor of the Exchequer not to touch our pension funds

The boss of one of the UK’s biggest pensions firms has warned the Chancellor of the Exchequer against tax changes that could discourage people from saving for retirement.

Antonio Simoes, who took over as head of Legal & General earlier this year, said savers needed “stability” to convince them to keep their money for the long term.

This comes amid speculation that Rachel Reeves will raid pension savings in next month’s Budget, after the Government warned of “painful” decisions.

One option is to reduce the level of tax relief on contributions for savers who pay a higher rate of tax. Another is to reduce the amount of the tax-free lump sum that can be withdrawn.

Simoes declined to give details when asked about specific policies, but said: “The important thing is stability. We need people to invest more for their retirement and if incentives keep changing there will be no stability,” Simoes said.

“It’s important that people have incentives to save their money, so that we can build up long-term savings pots that can be invested in energy and other areas.” Simoes supports measures to encourage “more of the assets held in pension plans to work harder for the UK economy.”

And as a member of a taskforce advising Labour on its plans for a National Wealth Fund (which will look at ways to boost investment in net-zero emissions), his views will carry weight at the Treasury.

L&G manages more than £1 trillion in assets worldwide. In the UK, it manages the retirement savings of more than 5.3 million people, worth a total of around £146 billion.

Mr Simoes told the Mail on Sunday: “We want to see stability and we want to encourage long-term savings and productive finance. We want more of this money to be invested in the real economy.”

He said L&G “strongly supports” stability and “provides incentives for people to do the same”. This comes after Aviva chief executive Amanda Blanc urged ministers to think carefully about amending the pension tax cut and the long-term impact it could have.

Last week, the bosses of six other pension firms representing millions of savers lined up to warn the Chancellor of the Exchequer in The Mail on Sunday of the damaging consequences of a raid on pension contributions.

Pensions are a target for the Labour Party, which has ruled out raising income tax, VAT or corporation tax.

The Institute for Fiscal Studies think tank has urged the Chancellor of the Exchequer to launch a £2bn raid on the pension pots of wealthy savers by slashing the amount that can be withdrawn as a tax-free lump sum.

He has also called for pensions to be subject to inheritance tax and for National Insurance to be taxed from employers’ pension contributions.

But he warned against reducing income tax relief on pension contributions for higher earners, describing such a move as “damaging, complex and inequitable”.