The boss of Aviva has urged Labour not to ‘fly kites’ ahead of the Budget and rule out a tax raid on pensions to ease savers’ fears instead.
The insurer’s chief executive Amanda Blanc said previous speculation that the tax-free pension lump sum would be slashed had caused many to take cash from their retirement pots needlessly.
In the run-up to last year’s Budget, persistent rumours that the valuable pensions perk would be targeted led to ‘significant’ withdrawals by anxious savers – decisions that could not be reversed, Blanc said.
Rachel Reeves, Chancellor at the time, eventually left the limit on how much could be taken from a pension pot tax-free at £268,275.
‘Customers would have been better to wait and see what the Government was going to do,’ Blanc said.
‘What we don’t want is for customers to make decisions that in the long run they regret and when policies are not changed.’ The Government should be ‘encouraging people to save into their pension’ and not ‘double-taxing people’, she added.
Aviva also unveiled a 24 per cent increase in first-half operating profit to £1.3billin, beating analysts’ forecasts.
Speaking out: The boss of Aviva has urged Labour not to ‘fly kites’ ahead of the Budget
Blanc hailed the results as ‘very strong’ and said the integration of home and car insurer Direct Line, bought for £3.7billion last year, was ‘making very good progress’.
Aviva has already signalled that up to 2,300 jobs could be cut as part of its cost-cutting plans. The insurer also raised the interim dividend to shareholders by 7 per cent to 14p per share.
The Treasury said Chancellor John Healey would set out his decisions ‘at fiscal events, rather than routinely commenting on rumour, speculation or proposals’
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