"He adds that this moment echoes past fiscal squeezes when governments turned to pension reforms and stealth taxes to plug gaps. "From frozen allowances to lifetime limit changes, history shows that pensioners are the easiest targets. The political calculation is that they're less likely to shift their financial arrangements or take to the streets, but that calculation underestimates how much confidence and capital are destroyed in the process.""
""The numbers speak for themselves. Borrowing has surged far beyond expectations while growth remains flat and debt servicing costs are swallowing a larger share of national income," he explains. "When the Treasury finds itself under this kind of pressure, pensions are often first in line. They're seen as an easy source of revenue that can be tapped quickly, even if the long-term consequences are severe.""
Public borrowing reached £20.2 billion in September, the highest for that month in five years. Total borrowing for the first half of the fiscal year is nearly £100 billion, significantly above forecasts. Debt servicing costs are consuming a larger share of national income as inflation lingers and bond yields remain high. The combination of elevated borrowing, rising debt interest payments and ambitious spending commitments increases pressure on the Treasury to find quick revenue. Pensions are viewed as an accessible source of revenue, with past measures including frozen allowances and changes to lifetime limits. Targeting pensions risks eroding consumer confidence and destroying capital.
Read at London Business News | Londonlovesbusiness.com
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