Wonkhe’s helpful summary of the budget’s implications for higher education omitted one seemingly unimportant but potentially transformational factor.
This is the likely effect of combining the removal of the cap on the amount that can be saved into a pension, the “lifetime allowance”, with the opposition’s commitment to reintroduce this cap after the next election.
The resultant short-term “window of opportunity” offers a stark choice to every senior academic with a relatively high salary and a few decades of pension accrual who thinks the next government is likely to be Labour. The choice is either retire and draw pension before the next election or retire, draw pension after the next election but face an eye-watering 55 per cent (in some cases, six figure) tax charge on pension savings above the cap.
Universities’ annual accounts indicate that up to 4,000 senior academic staff, including world-leading researchers and many vice chancellors, could now be facing this choice.
