Tax relief meddling will destabilise pensions and reach beyond top earners
05 December 2012
The National Association of Pension Funds (NAPF) reacted to the Autumn Statement and the announcement of a cut in tax relief for those saving into a pension.
Joanne Segars, NAPF Chief Executive, said:
“The Government will take twice as much from this tax hit on pensions as it will from the increase in the bank levy. That cannot be fair, and will only undermine confidence in pension saving.
“The Chancellor is wrong to say that the changes will only affect those at the top of the wage tree. Osborne claims he is taking a carrot away from the rich, but he is also beating many middle class savers with a stick. Middle managers in the public and private sectors will get caught in the net.
“People in a final salary pension who have worked loyally for the same employer for years and then get a pay rise, or a promotion, could end up with a tax bill of several thousand pounds. This is a charge just for saving into a pension. The self-employed and those nearing retirement desperately trying to ‘catch up’ by boosting their pension are also at risk.
“What we desperately need is stability, so that people can trust the pensions system and get on with saving for their old age, instead of being treated like a cashpoint when things go wrong. This raid also adds an extra layer of admin and cost for the businesses trying to run final salary pensions.
“The Government is unpicking the benefits of saving into a pension at the same time as it is putting several million people into one. Yet again, workers will see the goal-posts being moved and wonder why they should bother. These are difficult economic times, but the Government needs to do much more to encourage people to have faith in saving, and to strengthen workplace pensions.”
Notes to editors:
1. The NAPF has spokespeople available for broadcast interview today.
2. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]