{"id":26855,"date":"2025-07-28T06:37:11","date_gmt":"2025-07-28T06:37:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/26855\/"},"modified":"2025-07-28T06:37:11","modified_gmt":"2025-07-28T06:37:11","slug":"britain-facing-pension-poverty-time-bomb-as-rachel-reeves-tax-grab-helps-crater-retirement-savings-by-20-per-cent-in-six-months","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/26855\/","title":{"rendered":"Britain facing pension poverty ‘time bomb’ as Rachel Reeves’ tax grab helps crater retirement savings by 20 per cent in six months"},"content":{"rendered":"

By CALUM MUIRHEAD<\/a> <\/a> and ELEANOR HARDING <\/p>\n

Published: 18:43 EDT, 27 July 2025 | Updated: 20:44 EDT, 27 July 2025 <\/p>\n

Britain is facing a pension poverty ‘time bomb’ after Rachel Reeves<\/a>‘ punishing tax grab helped plunge retirement savings by 20 per cent in six months.<\/p>\n

Survey figures suggest Britons may have been reducing their pension contributions since Christmas<\/a> as the economy reacted to Labour’s new tax regime.<\/p>\n

The Chancellor’s national insurance hike has been partly blamed for high inflation<\/a> this year, raising the cost of goods and services.<\/p>\n

Critics said last night the increased cost of living<\/a> is ‘squeezing’ households and preventing people from putting money away for their retirement.<\/p>\n

As a result, the average monthly pension contribution has slumped to \u00a353.40 this month from \u00a359.10 in April and \u00a365.10 in December.\u00a0<\/p>\n

This is the first time in two years contributions have dropped for six months in a row, according to data from the House Money Index compiled by price comparison website MoneySuperMarket.\u00a0<\/p>\n

At the same time, average household spending on bills and other outgoings surged by 12 per cent to \u00a31,564\u00a0per month.<\/p>\n

The data showed the average Brit is now shelling out \u00a352.14 per day on essentials, up from \u00a346.40 in December.<\/p>\n

\"Britain <\/p>\n

Britain is facing a pension poverty ‘time bomb’ after Rachel Reeves ‘ punishing tax grab helped plunge retirement savings by 20 per cent in six months<\/p>\n

\"Survey <\/p>\n

Survey figures suggest Britons may have been reducing their pension contributions since Christmas as the economy reacted to Labour’s new tax regime. Pictured: File photo\u00a0<\/p>\n

\"Work <\/p>\n

Work and Pensions Secretary Liz Kendall (pictured earlier this week) said the Government was reviving New Labour’s Pensions Commission to help people save more<\/p>\n

Kara Gammell, personal finance expert at MoneySuperMarket, said: ‘People are reducing their private and workplace pension contributions, perhaps to help offset rising costs and stretched household finances.’<\/p>\n

Last night, Helen Whately MP, shadow pensions secretary, said: ‘Britain is facing a pension poverty time bomb of Labour’s making.<\/a>\u00a0<\/p>\n

‘By squeezing the public with more taxes and higher bills, people are being forced to make terrible choices \u2013 choices we won’t see the full consequence of for years.\u00a0<\/p>\n

‘The Conservatives will always stand on the side of the makers \u2013 those who work hard, do the right thing, and want to get on in life.<\/p>\n

‘And so we will hold Labour to account for the economic mess they are making.’<\/a><\/p>\n

John O’Connell, chief executive at the TaxPayers’ Alliance said: ‘Sky-high taxes and soaring living costs mean hard-pressed households are dipping into their retirement savings just to stay afloat.’<\/p>\n

This month, the Office for National Statistics said UK inflation jumped higher than economists had expected<\/a> to 3.6 per cent in June, up from 3.4 per cent in May. It marked the steepest increase since January 2024, with critics blaming Mrs Reeves’ ‘job tax’.<\/p>\n

Work and Pensions Secretary Liz Kendall said the Government was reviving New Labour’s Pensions Commission to help people save more.<\/p>\n

She said: ‘People deserve to know they will have a decent income in retirement \u2013 with all the security, dignity and freedom that brings.<\/p>\n

‘But the truth is, that is not the reality facing many people, especially if you’re low paid, or self-employed.<\/p>\n

‘The Pensions Commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place.<\/p>\n

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\n Britain facing pension poverty ‘time bomb’ as Rachel Reeves’ tax grab helps crater retirement savings by 20 per cent in six months<\/p>\n