Rachel Reeves ‘targeting pensions and property’ as savers warned | Personal Finance | Finance

An expert has warned Brits to “act now” as Rachel Reeves is thought to be preparing “targeted moves” on pensions, assets and property. The Chancellor needs to plug a gap in the public finances after a Government U-turn on welfare blew an estimated £3billion hole in the public finances. Specialists suggest this could be resolved by increasing tax revenue or cutting spending. The National Institute of Economic and Social Research (NIESR), today suggested that there is a budget deficit of £41billion overall.

Nigel Green, CEO of finance firm deVere Group, said “the question is no longer if taxes will rise in the UK, but how quickly and how sharply”. He added: “This is the moment for anyone with UK assets to stop waiting and start acting. The Treasury can be expected to go after capital, property, investment income — because that’s where the money is.” Mr Green specified that wealth holders face “real, very targeted moves” on “portfolios, pensions, business assets and property”.

The specialist also pointed to Labour’s manifesto promise not to raise income tax on “working people”, and said ministers have been “careful with the language — and the definition”.

This leaves scope for “significant moves on capital gains tax, dividend income, inheritance thresholds and so-called ‘wealth loopholes'”.

“This is where the money will come from and not just for the shortfall, but to fund public services and keep the bond markets happy,” Mr Green said.

“When governments feel cornered, they move fast,” he added. “The people who protect their wealth are the ones who plan early.”

Those who take action before the autumn Budget, the financial advisor said, will be in the strongest position to “manage, mitigate and ultimately grow their wealth under new conditions”.

“If she [Rachel Reeves] wants to raise £40bn then I think one of the big taxes is going to have to be raised,” Stephen Millard, deputy director for macroeconomics at Niesr, told the BBC’s Today programme.

“If she does that then it will break the labour promise about raising taxes on working people.”

A Treasury spokesperson told the broadcaster: “As set out in the plan for change, the best way to strengthen public finances is by growing the economy – which is our focus.”