Pensions - Articles - Leave tax relief alone warn savers

 Portal Financial warns any reduction in tax relief, one of the main selling points of pensions, will impact on future retirement income. This could mean more people ultimately have to rely on the State for their retirement and, it would also reduce a key source of investment capital for UK businesses.

  

 Jamie Smith-Thompson, managing director of Portal Financial, says:

 “Tax relief is a key driver for pension saving; reducing it would be reckless as people need more encouragement to save, not less. It could also alienate voters and undermine business – two areas that won the election for David Cameron.”

  

 “Pledging to not increase VAT, National Insurance or income tax inevitably raises questions of where the money is going to come from. Pensions can be seen as an easy touch and recently, we have seen the Lifetime Allowance slashed from £1.8 million to £1 million and the Annual Allowance reduced by 84%. £1million sounds huge but would currently only provide an annual index-linked income of about £20,000. Until the government explicitly rules out further tax reductions it risks damaging confidence in pension saving.”