As Director of Public Prosecutions Sir Keir had a special tax perk he says he never used (Image: Getty)
During his time as Director of Public Prosecutions Sir Keir Starmer had his very own law which gave him a “special tax perk.”
The Prime Minister's loophole, from his time as Director of Public Prosecutions, exempted him from the ￡1 million lifetime allowance - a limit on the total value an individual’s private pensions could reach before high tax rates were applied.
In his first Budget, in March 2023, Chancellor Jeremy Hunt announced the abolition of the pensions lifetime allowance - which made the special exemption for Sir Keir obsolete.
Shadow Chancellor Rachel Reeves, however, stated Labour would reverse the changes to tax-free pension allowances saying it was “the wrong priority, at the wrong time, for the wrong people”.
But the Treasury has now revealed there are “no plans” to do so in reply to a written question by Richard Holden, a former Tory chairman.
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Chancellor Rachel Reeves said she'd reinstate the rule (Image: Getty)
Mr Holden said: “Sir Keir Starmer has (surprise, surprise) U-turned on his pledge to scrap his own special tax perk!” reports The Telegraph.
Sir Keir was granted the special “tax unregistered” pension scheme when he stood down as Director of Public Prosecutions (DPP) in 2013.
Sir Keir, however, insisted he had not taken advantage of the tax break - “Nor do I want to,” he said.
Mr Holden this week put a written parliamentary question to the Treasury.
It was “to ask the Chancellor of the Exchequer if she will take steps to repeal the Pensions Increase (Pension Scheme for Sir Keir Starmer QC) Regulations 2013.”
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Darren Jones, the Chief Secretary to the Treasury, responded to the question.
He said: “The 2013 regulations were introduced to ensure the Director of Public Prosecutions’ pension scheme is uprated in line with other public service pension schemes. There are no plans to repeal the regulation.”
Rumours that Keir had changed his mind on plans to reintroduce the pensions lifetime allowance surfaced before their landslide victory. There were concerns bringing back the cap could lead to the return of the doctors' strikes.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "The news will be greeted with a sigh of relief by people who can now plan ahead for their futures with more certainty.
"There were still tweaks to the rules in legislation needed to finalise the removal of the lifetime allowance when the election was called.
"It will be a relief to those planning their retirement that Labour have committed to finish the job."
Ms Morrissey said the removal of the lifetime cap is important for all pension savers. She explained: "The Conservatives pledged to ditch the lifetime allowance over a year ago and now with a cross-party consensus people can move forward with their planning.
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"The lifetime allowance affects more than just ultra-high net worth people. It could be an issue for many who have saved diligently for their future.
"Any reform of the pension tax system should be done with the aim that people are properly incentivised to save for their futures without having to worry about being tripped up by complex rules.
"Pensions planning is a long-term business, creating consensus around the rules is essential."