As Trump smashes our pensions, Rachel Reeves plots to grab what’s left | Personal Finance | Finance

Trump’s chaotic trade war has wiped trillions from global pension values. UK retirement pots are heavily invested in shares and bonds and have been caught up in the carnage.

Private sector workers now mostly rely on defined contribution (DC) pensions, as do personal pension savers. These aren’t backed by employers or protected by the state.

What people get at retirement depends entirely on how much they save and how well their investments perform.

A stock market slump like this can knock tens of thousands of pounds off their future income, and there’s nobody to make up the difference.

That’s in stark contrast to the public sector.

Public sector employees enjoy gold-plated defined benefit (DB) schemes that promise a guaranteed income for life.

These aren’t exposed to stock market turbulence. Instead, they’re backed by the taxpayer. As those with company and personal pensions take a massive hit, public sector pensioners are shielded from the chaos.

This suits Labour down to the ground. It’s the party of the public sector.

Chancellor Rachel Reeves will never touch public sector DB pensions, no matter how expensive they become.

Instead, she’s plotting to launch yet another tax raid on private pensions, by making them subject to inheritance tax from 2027.

She may target them a second time, with many on the left demanding she slashes higher rate tax relief on private pension contributions too.

The double dealing is scandalous.

Reeves should be doing everything she can to encourage pension saving.

Strong private sector and personal pensions mean less pressure on the state later and fewer claims for pension credit, and other means-tested benefits.

Instead, she’s treating pension savers like a cash machine.

DC savers have one major advantage over those with DB public sector pensions. They can pass on their unused pension pots to loved ones when they die.

And even that’s limited.

If they die from age 75 (as most will), their beneficiaries must pay income tax on the money when they withdraw it.

That clearly irks Reeves. Rather than help savers, she’s finding new ways to raid what little remains of our private pension pots.

She’s now consulting on how to slap inheritance tax (IHT) on unused pension pots, on top of the income tax already due.

So grieving families will pay tax not once but twice on the same pot of money – first IHT, then income tax.

As I’ve written before, they could hand up to 84% of an inherited pension to HMRC as a result. Some reward for a lifetime of saving.

Reeves is ready to sweep away the one crumb of comfort private savers still had.

Meanwhile, public sector pensions will remain entirely untouched.

Private pension savers carry all the risk. And thanks to Labour, they get none of the protection.

We’ve been here before.

It was former Labour Chancellor’s Gordon Brown who started the private sector pension demolition job with his 1997 tax raid on company pension funds.

Reeves is now picking over what’s left.

Whatever Trump leaves pensioners, Reeves is already planning to confiscate. While the public sector is shielded from both of these destructive forces.