Budget Response: Higher Rate Tax Relief

Robert Graves, Rowanmoor Pensions responds to the 2010 Budget announcement on the restriction of higher rate tax relief on pensions:

“Has the Chancellor had selective amnesia and forgotten the ideals of Pensions Simplification? Why make a show of consulting with the industry on restricting pension tax relief if only to ignore what it suggested?

“There has been extensive consultation with the industry, the result of which was many key pensions trade bodies, such as AMPS and the NAPF, gave a very clear message: ‘Do not implement the complex tax restriction but reduce the Annual Allowance down to £50k – £60k from £215k’.

“Alistair Darling has not only ignored our industry but has put financial advisers in the precarious position of having to now advise clients for two scenarios should their income slip over the threshold. This model is unworkable and yet the Government is still trying to bang a square peg in to a round hole and will continue to expend resources on further consultation on how to try and make it work.”