When Rachel Reeves moved into No 11 Downing Street, I was genuinely touched by her message to young women and girls.
‘Let there be no ceiling on your ambitions, your hopes and your dreams,’ she said.
Her words took me back to my childhood as the daughter of a steelworker in the North East. Then, my dreams of a Fleet Street career being fulfilled seemed as unlikely as me landing on the moon.
Sceptical though I was about Reeves, I wanted her to succeed: for the sake of the country and for the sake of all the females watching her that day.
Larceny
Now she wants to pilfer my pension – and yours – and I could not be more disillusioned with our first woman Chancellor. She is not a role model for little girls with big dreams, as I once was.Â
No, she is hell-bent on trampling over people’s ambitions and crushing their efforts to improve their lives.
The latest onslaught involves curbing the tax breaks on ‘salary sacrifice’ schemes. It is one of a volley of potential acts of pension larceny, putting anyone aged 50 or over who has some Âsavings for retirement in a state of high anxiety.
As for those in younger age brackets, the Chancellor is making pension saving – always a hard sell for people when retirement seems a long way off – even less of an attractive prospect.
Having put in decades of hard graft to climb the career ladder, I had hoped to be rewarded with some financial security when I reached old age, writes Ruth Sunderland
As someone from a working class background, taught from birth to strive for a Âbetter life, this jars with all my values – which ought to be Labour values too.Â
The bombardment of threats from Reeves – against people whose only crime is to have worked hard and been prudent – is relentless. She should be encouraging these traits, which are, after all, traditional Labour values, not punishing us.
Having put in decades of hard graft to climb the career ladder, I had hoped to be rewarded with some financial security when I reached old age. Yet like millions of other middle-aged, Âmiddle-class people, Reeves’ pension siege is the source of a great deal of stress.
The ‘salary sacrifice’ raid she is said to be planning is complex. These schemes allow employees to give up part of their pay and put it into their pension. This is transferred before tax or National Insurance are charged, so it reduces their taxable income.
Reeves is reported to be planning to limit the amount that can be ‘sacrificed’ in this way to £2,000 a year, with anything above the limit becoming liable to National Insurance.
That would hurt employees paying more than that figure into their pension. It would also hit employers, who under current salary sacrifice arrangements don’t have to pay the 15 per cent National Insurance charge on the portion of an employee’s salary put into a pension.
Greedy
As a result, it piles yet more pressure on firms over their payroll costs. And business is already groaning under increases in National Insurance and the minimum wage, which have put up the costs of hiring, particularly when it comes to younger workers.
The bombardment of threats from Reeves – against people whose only crime is to have worked hard and been prudent – is relentlessÂ
Strip away the technicalities and the message is simple: Reeves is clobbering companies and individuals for trying to do the right thing. The Chancellor clearly sees pensions as a giant jam pot in which she wants to dip her greedy fingers.
She is egged on by her pensions minister Torsten Bell, previously a leading light of the Left-wing Resolution Foundation think tank.
Among the other measures being touted is a slashing of the rate of tax relief on payments into a pension. Currently this matches the highest rate of tax the individual is paying. And so the millions who are paid more than around £50,000 benefit from 40 per cent tax relief, while high earners on more than just over £125,000 get 45 per cent. Under Reeves’ Budget plans it might be cut to 30 per cent for all, or even less.
Millions more people, by the way, have been dragged into the higher tax brackets because the thresholds have been frozen since 2022, so such a change would not merely harm the ‘well-off’.
Reeves also expressed support for bringing back a ‘lifetime limit’ on pension pots of just over £1million, that was rightly scrapped by her Tory predecessor Jeremy Hunt.
She has already caused misery and mayhem by putting stock market-linked pensions into the inheritance tax net from April.
Another scary option, reducing the amount people can take as a tax-free lump sum, currently just under £270,000, seems to have Âbitten the dust.
Phew. But even if her plots don’t materialise, just airing them has become damaging. It gives people like me, who feel too young to retire but too old to repair Reeves’ pension vandalism, a deep sense of foreboding.
The rot began to set in under Gordon Brown, who in 1997 launched a £5billion a year tax raid on pension fund dividends. Commentators warned the measure would be harmful and so it came to pass
The pre-Budget kite-flying has encouraged many to take lump sums out of their pensions when it’s not in their best interests to do so.
The cumulative effect of the speculation is to erode people’s willingness to save in a pension at all. This is at a time when, as a nation, we are already setting aside far too little. Women, in particular, are at risk of not earmarking enough for a comfortable retirement.
The cost-of-living crisis means it is too easy in many households to neglect pension contributions in favour of more immediate needs.
The long-term harm this can create is immeasurable. After all, a pension with tax incentives is a valuable job ‘perk’ that could be used to encourage some of the 9.4million economically inactive people in the UK to go back into the workplace. At the same time as Reeves is Âtrying to plunder pension funds to fix the Budget black hole, she is also trying to make these funds invest more money in the UK.
It makes no sense. Labour’s contempt for pension savers is as intellectually incoherent as it is distasteful.
The rot began to set in under Gordon Brown, who in 1997 launched a £5billion a year tax raid on pension fund dividends. Commentators, including me, warned the measure would be harmful and so it came to pass.
The Brown raid was a major contributor to the demise of gold-standard final salary pension schemes in Britain. These pensions, which offered a secure income in retirement for life, have largely been replaced by much riskier stock Âmarket-linked vehicles. Reeves is intent on finishing what Brown started.
Battered 
The only people who can look forward to a decent retirement with any sense of certainty are public sector workers, who still enjoy gold-plated pensions – as, of course, do Westminster politicians like Reeves herself
The only people who can look forward to a decent retirement with any sense of certainty are public sector workers, who still enjoy gold-plated pensions – as, of course, do Westminster politicians like Reeves herself.
Pensions are a key battleground in the war on aspiration. Strivers are not respected but treated as cash cows to be taxed and now fleeced of their pensions. Of course it will backfire politically. Of course it will undermine her aim of encouraging greater investment in UK plc to rebuild our battered economy.
This electoral and economic self-harm, however, comes as little consolation when you are watching your retirement hopes suffer death by a thousand cuts.
Having been brought up in a staunchly Labour household, I voted for the party all my life until 2019. It broke my heart when, faced with Jeremy Corbyn, I could no longer bring myself to do so.
I always felt Labour was the party that supported people like me trying to make our way in the world.
Now they are coming after my pension – and I just feel betrayed.