The Government’s announcement that the limitation on higher rate tax relief on pensions will be extended to those earning over £130k is yet another attack on pensions and sends completely the wrong signal to savers says Friends Provident.
Less than 8 months since announcing restrictions on tax relief for those earning over £150k, Chancellor Alistair Darling in his pre budget report today has changed the rules once again – now anyone with an income over £130k could be caught.
Friends Provident believes the Government’s latest move demonstrates once again how pensions are being treated as a political football in a game where the goalposts are constantly shifting.
James Ward, director of UK corporate, Friends Provident said: “This latest move will add yet another unwelcome layer of complexity to pensions in the UK. At a time when we should be pulling out all the stops to encourage people to save, the Government is instead creating barriers to prevent it. We need to highlight the benefits of saving into pension schemes and this constant tinkering around the edges is chipping away at consumer confidence and has to stop. The question remains- whatever happened to pensions simplification?”
