We have scary headlines over the Pension Salary Sacrifice yesterday. But the announcement is not about 25 but 29. It’s a slight of hand by Bell and Reeves. It pleases markets but hurts no-one.

Putting aside the number ( I think the number should be more like £4.7 bn in 2009), we should be very wary of this being scary,

The National Insurance rises in last year’s budget came in almost immediately and was a tax for dough. This is coming in –  in 2029 ;  it’s a tax for show.

how with nowhere to go.

It will be a legacy if it comes in for the next Government and I don’t think it will last very long. The point of the tax is that it is caught in a five year cycle that will mean Rachel and Torsten can put nearly £5bn onto the headroom without hurting the economy till this Government is nearly gone,

It will be part of the £20bn of taxes that the bond market will feel good about, marking down the price of borrowing for Rachel Reeves and making our financial markets in general feel we have a responsible Government, but it will cost the pension saver nothing for over three years (if it costs us anything).

By the time April 2029 arrives, pension will be quite different than it is today. We will have CDC UMES (whole of life), we should have Retirement CDC, we will have a requirement on our DC workplace plans to pay pensions (or flex and fix) and we will have a consolidated pension space investing in a different way for a retirement income for the rest of its saver’s lives.

Timeline from the Government’s Pension Scheme roadmap

Against all this, the possible cut in incentives for those sacrificing more than £2,000 (5% of £40,000 pa, will be insignificant.

Numbers from David Robbins and WTW

Little to moan about; let’s get on with the job in hand and let the professional whingers moan away. 2029 is a long way away and there is much to do in the meantime.

We will all have our chance to put our houses in order between now and then. This headline like the one I started with , is scaremongering .