Telegraph Money

The week's most important personal finance news, analysis and expert advice, from pensions and property to investment ideas and savings tips.

Who will feed the hungry taxman

Tax rises are inevitable, that much we know. But it’s unclear who will be on the receiving end of bigger bills. In the meantime, it seems we’re all participating in the worst game of spin the bottle.

From homebuyers and freelancers to investors and pensioners, no one is immune. The Chancellor Rishi Sunak has warned of tough times ahead as he strives to plug the gaping black hole the pandemic has punched in the public finances.

Struggling freelancers have already working more hours for less money, Harry Brennan writes. But the Chancellor has hinted they will be in for more pain and could be forced to pay the higher rates of National Insurance in line with employees. Half a million freelancers have already given up the dream of working for yourself, according to the Office for National Statistics.

Meanwhile, figures released this week showed the state pension bill soared to 6.2 trillion, rising 21pc in the three years to 2018. This spells bad news for pension savers, as the Government may have to squeeze the generosity of retirement savings to meet the growing liability.

A Budget never goes by without rumours of a reform to pensions tax relief. But the enormous pressure to raise taxes could push Mr Sunak to bite the bullet. Reform would allow the Government to make billions in savings each year. A move would put those on middle and higher incomes in the crosshairs for cuts.

There’s little you can do to shield your income from the taxman but the good news is that you can save thousands by getting retirement finances in order. Figures compiled for Money Telegraph by LCP, a consultancy, showed that moving your pension pot to a provider with cheaper fees can save you more than four years’ worth of retirement income.

Homeowners could also be in the line of fire come Budget day on March 3. The Chancellor is said to be mulling over plans for a new proportional property tax that would do away with council taxes and stamp duty. The change would lower costs for the average household but would prove unpopular with many in the South where property prices are highest.

For now, nothing is slowing hopeful buyers as second home purchases have jumped 59pc year-on-year. Londoners in particular have been snapping up getaway pads, with many ditching the capital for a more rural life.

Make the most of all our content by signing up for a subscription here – your first month is free. And don't forget to visit Telegraph Money for news, advice and inspiration.

Top stories

Money Makeover

Your money

• Retirement | Move your pension, get four extra years of income
• Saving tips | Savers warned not to be enticed by prize draw apps
• Investing | What is Dogecoin and how can I buy it?
• Property | City centre rents suffer biggest collapse since 2008

Best of the rest

Here's what our readers said

In our comments section, Colin Bond said of ‘Five tax rises Rishi Sunak is considering – and the chances of them happening at the Budget’: "If I had to give Mr Sunak an idea I would look at the trillions of pounds tied up in house price inflation, which is non-productive. The owner who bought a house for 100,000 and sells it years later for 400,000 has done nothing but live in it. Someone who invested in a business with 100,000 and turned it into 400,000, would have paid tax along the way. It's a hot potato - but taxing unearned income does less damage to the economy than taxing the productive side of the economy."

Join the conversation here