Use your pension tax breaks now before Rishi Sunak launches next stealth raid – COMMENT | Personal Finance | Finance

Successive Chancellors have viewed our pension savings as a giant cash cow, to be milked whenever the nation’s coffers run dry. Now it’s Rishi Sunak’s turn.

Those with longer memories will recall former Chancellor Gordon Brown’s stealth pensions tax raid, which he launched back in 1997.

Brown scrapped tax relief on pension firms’ dividends, effectively destroying the country’s gold-plated final salary schemes.

The move saved the Treasury almost £7 billion a year – and our total losses have probably topped £200 billion by now.

Sunak has been taking a leaf out of Brown’s book.

He’s not the first and won’t be the last. Our pension pots are a sitting target in any tax raid.

The pensions lifetime allowance stood at a thumping £1.8 million, in the 2011/12 tax year.

Only the very wealthy with huge pension pots paid it then. Successive chancellors slashed it back to a low of just £1 million and suddenly, you didn’t have to be that rich to pay it.

Last March, Sunak froze it at £1,073,100 for five years, in a move that will drag more savers into the net every year.

Anyone who exceeds the lifetime allowance will be hammered by a brutal 55 percent tax charge. It’s as if they have committed a crime, when all they have done is set money aside for their future.

Now Sunak may come back for more.

READ MORE: Sunak plots new pension stealth tax raid next month – multiple fronts

unak is no doubt running through his options, to see which can combine maximum financial gain with minimum damage to his prospects of becoming Conservative Party leader.

There is only one thing you can do to defend yourself, and that’s to make maximum use of these tax allowances while they last.

If you belong to a workplace auto-enrolment pension with employer contributions and tax relief, do not opt out.

If you are eligible for higher rate tax relief on pension contributions, top up your pot and claim all you can.

Invest as much as you can sensibly afford each year in a pension, in case the annual allowance is cut at some point.

If you risk busting through the lifetime allowance, consider paying money into a Stocks and Shares Isa instead.

Milk your pension tax breaks to the max. Before Rishi Sunak does.