Pension funds hit as windfall tax wipes £600m from share price

Victoria Scholar, of stockbroker Interactive Investor, said a tax on Shell and BP had been considered for some time and was likely to have been factored into the share price. However, companies beyond the oil giants have also been hit by investor concern after it became clear earlier this week that any tax would also include them, she said.

“The SSE fell sharply when we discovered other public services would face a windfall tax. They are losing ground today as the Chancellor prepares to unveil her emergency aid package, the tax being high on the charts and hitting a range of energy companies,” she added. .

Rob Burgeman of Brewin Dolphin, a wealth manager, said investors would experience short-term shocks to the value of their savings, but stock prices should stabilize over time.

However, he added: “These are businesses that people own for the dividends, from which they live. A windfall tax could have serious consequences in the future.”

Pension pots could be damaged by such a tax, Education Secretary Nadhim Zahawi warned earlier this week. A one-off levy on energy companies would likely lead to a reduction or elimination of dividends altogether, he added.

More than half of savers fear a windfall tax will have a negative impact on their pension, according to a survey by Interactive Investor. The Chancellor will announce the new package to MEPs later today.