Deputy PM Angela Rayner is pushing to bring back a pension tax that experts have branded “heinous” and “horrific”.
It’s a 55% levy on people who’ve saved too much into their pension pots, through decades of hard work and careful planning.
It punishes those who’ve done the right thing by taking personal responsibility for their retirement.
Angela Rayner plots to restore pension ‘horror’ tax – takes 55% of your retirement savings
Deputy PM Angela Rayner is pushing to bring back a pension tax that experts have branded “heinous” and “horrific”.
By Harvey Jones
06:37, Wed, May 21, 2025 | UPDATED: 08:09, Thu, May 22, 2025Share ArticleBookmark
Angela Rayner is keen to launch a new tax raid on the (Image: Getty)
It’s a 55% levy on people who’ve saved too much into their pension pots, through decades of hard work and careful planning.
It punishes those who’ve done the right thing by taking personal responsibility for their retirement.
DON’T MISS
Powered by 
Huge tax warning as Keir Starmer refuses to rule out brutal hikes
One million pensioners face tax bombshell due to frozen thresholds
Starmer has been PM for 320 days and he’s already made 13 humiliating U-turns
Rachel Reeves’ controversial cash ISA plan blasted as ‘penny-pinching grab’
Pensioners born before this date dealt huge tax blow
HMRC sends UK households £98,700 pension tax bills
More than 1m pensioners hit by highest tax rates in ‘triple whammy’
Labour ‘couldn’t grow a plant’ says Esther McVey as she skewers Angela Rayner
Reform UK’s Richard Tice rows back on huge £90bn tax cut promise
Rachel Reeves update on ‘£20,000 ISA axe’ but BBC expert says cash ISA still under threat
The battle to succeed Sir Keir Starmer has already started
DWP urges Brits going on holiday to act now or risk £3,900 payment
Rachel Reeves ridiculed after Government spend up saw highest borrowing surge in 5 years
Major pension update as experts issue ‘inheritance tax’ trap warning
Martin Lewis gives verdict on Starmer’s winter fuel payment U-turn with 2 big problems
State pensioners urged to fill in this DWP form to claim £7,800
Angela Rayner sparks Labour civil war as she demands Rachel Reeves hikes pension tax
Tax trap hits thousands raiding retirement pots – how to beat it
Brits hit with up to £98,000 tax bills for cashing in pensions – how to avoid
Hundreds of thousands of pensioners hit with surprise HMRC tax bill
Huge tax warning as Keir Starmer refuses to rule out brutal hikes
One million pensioners face tax bombshell due to frozen thresholds
Starmer has been PM for 320 days and he’s already made 13 humiliating U-turns
Rachel Reeves’ controversial cash ISA plan blasted as ‘penny-pinching grab’
Pensioners born before this date dealt huge tax blow
HMRC sends UK households £98,700 pension tax bills
More than 1m pensioners hit by highest tax rates in ‘triple whammy’
Labour ‘couldn’t grow a plant’ says Esther McVey as she skewers Angela Rayner
Reform UK’s Richard Tice rows back on huge £90bn tax cut promise
Rachel Reeves update on ‘£20,000 ISA axe’ but BBC expert says cash ISA still under threat
The battle to succeed Sir Keir Starmer has already started
DWP urges Brits going on holiday to act now or risk £3,900 payment
Rachel Reeves ridiculed after Government spend up saw highest borrowing surge in 5 years
Major pension update as experts issue ‘inheritance tax’ trap warning
Martin Lewis gives verdict on Starmer’s winter fuel payment U-turn with 2 big problems
State pensioners urged to fill in this DWP form to claim £7,800
Angela Rayner sparks Labour civil war as she demands Rachel Reeves hikes pension tax
Tax trap hits thousands raiding retirement pots – how to beat it
Brits hit with up to £98,000 tax bills for cashing in pensions – how to avoid
Hundreds of thousands of pensioners hit with surprise HMRC tax bill
Huge tax warning as Keir Starmer refuses to rule out brutal hikes
One million pensioners face tax bombshell due to frozen thresholds
Starmer has been PM for 320 days and he’s already made 13 humiliating U-turns
Rachel Reeves’ controversial cash ISA plan blasted as ‘penny-pinching grab’
Pensioners born before this date dealt huge tax blow
HMRC sends UK households £98,700 pension tax bills
More than 1m pensioners hit by highest tax rates in ‘triple whammy’
Labour ‘couldn’t grow a plant’ says Esther McVey as she skewers Angela Rayner
Reform UK’s Richard Tice rows back on huge £90bn tax cut promise
The tax is also a mess. It’s so “heinous” and “horrifically complex” that even financial advisers struggle to explain it, according to Tom Selby, director of public policy at AJ Bell. You can be under the limit one year and over the next.
And if you unwittingly cross the line at any point, you’re clobbered by HMRC.
This isn’t a fair or transparent way to raise revenue. If Labour wants to target wealthier savers, there are simpler and more honest ways to do it.
But Rayner doesn’t care about that. She just wants to grab some more tax.
And in an ironic twist, the only person standing in her way is Chancellor Rachel Reeves. Who has form herself when it comes to hiking taxes.
The levy in question is the pensions lifetime allowance (LTA). It caps the total value of pension pots people can build across workplace and personal schemes.
Crucially, it’s not based on what people contribute, but on how well their investments perform.
So if you save diligently for decades and make sensible investment decisions, you’re hit with a tax for doing too well.
NHS doctors are particularly hard hit. Thousands have taken early retirement as a result, hampering efforts to cut waiting lists.