Labour's Robin Hood tax plans: Pensioners will suffer as levy erodes retirement pots, says asset manager

Oliver Gill
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Royal London Asset Management said Labour's Robin Hood tax was bad news for savers (Source: Getty)

Pensioners will be hit hardest by Labour plans to introduce a Robin Hood tax, one of the UK's leading asset managers has said.

On Sunday the Labour party revealed plans to raise £4.7bn by changing stamp duty levels on shares and introducing a levy on other financial instruments such as derivatives.

Today the chief investment officer of Royal London Asset Management, Piers Hillier, said: "Those that would be hit the hardest are pensioners and those saving for a pension, who will see the value of their savings impacted by the levy."

Read more: Labour Party under fire over "Robin Hood tax" plans for City

The Labour proposals drew criticism from leading experts over the weekend. And last July London mayor Sadiq Khan said plans for a City transaction tax were "madness".

Hillier added: “This is not a tax on the City; it’s a tax on savers and pensioners.

“At a time of uncertainty about which markets investors will choose to utilise post Brexit, adding a further levy would significantly reduce the global competitive position of London.

"Transactional volumes will move to markets without a levy. Jobs will follow those volumes and as a consequence the overall tax take is likely to be lower due to reduced income tax and corporation tax paid."

Labour has also pledged to cap increases in the state pension age to 66.

This compares with current plans in place to increase the retirement age to 68 over two phases, the second of which finishes in 2046.

Read more: State pension would need to be slashed by £800 a year under Labour plans

Tom McPhail, one Britain's leading pension experts, said Labour leader Jeremy Corbyn's plans to cap the state pension could only be balanced by reducing the annual state pension. He said annual payouts of £8,000 would need to be reduced by £800 to offset the impacts of the Labour policy.

Meanwhile former Liberal Democrat pensions minister Steve Webb estimated if current state pension payout commitments were kept, the Labour age cap plans would cost the exchequer £300bn.

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