Scots who decide to ‘cash in’ their pension face paying thousands of pounds extra thanks to the ‘Nat Tax’, the Scottish Conservatives are warning today.
Anyone in the UK aged 55 or over can take out their full pension pot, with 75% of the cash taxed as income.
The SNP Government’s decision to increase the basic, higher and additional rate of tax last week means people in Scotland now face higher tax charges on that pension than they would face if they lived elsewhere in the UK.
The average pension pot for somebody aged 55-65 is currently £105,000. Scots with such a pension will have to pay an extra £527 if they decide to cash out.
The tax penalty rises for those with higher pensions. For example, Nicola Sturgeon, who currently has a £241,000 pension pot, would have to pay an extra £1,801 if she decided to claim her pension today.
The Scottish Conservatives are today stepping up their calls for the SNP to call off their ‘Nat Tax’, saying it will only damage economic confidence in Scotland, further reducing growth, and reducing tax receipts.
Scottish Conservative shadow finance secretary Murdo Fraser MSP said:
“The Nat tax will hit Scots during their working life, and now we learn that it could hammer them when they retire too.
“This is a classic unintended consequence of tax rises and only goes to show that the SNP simply haven’t thought through these half-baked plans.
“The SNP’s message to Scots who decide they want to access their pension pot is - don’t aspire to save, because the Scottish Government is coming for you.
“Scotland’s tax powers are there to be used responsibility to help grow the Scottish economy. The SNP is using them to wreck it.”