UK to reveal stealth tax raid on pensions later this month-The Telegraph

Cabinet Meeting

(Reuters) -British Prime Minister Rishi Sunak and finance minister Jeremy Hunt plan to reveal a stealth tax raid on pensions later this month, The Telegraph reported on Friday.

The pension lifetime allowance is set to be frozen for two more years, with a rise in line with prices delayed from 2025 to 2027, the newspaper said, without citing sources.

The allowance level has risen with prices in the past, but Sunak, as the finance minister last year, froze the allowance until 2025. The move was forecast to bring the Treasury close to a billion pounds over the period, Telegraph said.

The Treasury is now planning to announce that the freeze will be extended until 2027, the end of the five-year period for which plans will be produced, the report said.

Sunak and Hunt, who need to fill a fiscal gap of nearly 50 billion pounds ($56.88 billion) during the Nov. 17 budget, have agreed to split the cost roughly equally between spending cuts and tax rises, according to the report.

They do not want to break the 2019 Tory election manifesto promises or raise the rates of major taxes, the Telegraph said, citing Treasury sources. They are also determined to make sure the well-off carry more of the burden for the tax rises than the poorest.

($1 = 0.8791 pounds)

(Reporting by Juby Babu in Bengaluru; Editing by Leslie Adler and Daniel Wallis)