Royal London slams double pension tax plan

Cash-strapped Chancellors should not be given the temptation to take two helpings of tax from pension savings, the boss of the UK’s biggest mutual life and pensions firm, Royal London, has warned.

Chief executive Phil Loney spoke out on the Treasury’s review of pension tax incentives unveiled by Chancellor George Osborne in July’s Budget.

One of the options being considered is a reversal of the current regime — where pension contributions are tax free with tax deducted on retirement — to a system where contributions are taxed but payouts in retirement are tax free.

But Loney says the potential change — alongside reducing the size of pension pots — hinges on future Chancellors sticking to their promises.

“Nobody should be asked to save for 30-plus years without absolute certainty that savings made from their income will not be taxed twice.