CPS reiterates calls for scrapping of pension tax relief and LTA

Professional Adviser published an article, 1 May 2017, which looked at the latest CPS publication “A Pensions and Savings Manifesto”. The paper, published 2 May 2017, sets out proposals to improve, simplify, and equalise the pensions and savings situations of British people. Report author Michael Johnson hopes all political parties will conider these proposals for the upcoming election.

“The Centre for Policy Studies (CPS) has renewed its calls for a scrapping of pension tax relief and the lifetime allowance, to encourage people to save more and reduce the cost to the Treasury.

The Pensions and Savings Manifesto…said income tax relief on pension contributions – that cost the Treasury £30.4bn in 2015/16 – should be replaced by a single 25% ‘bonus’ on post-tax pension contributions.

It also said the annual allowance should be reduced from £40,000 to £10,000, as both income tax relief and the allowance benefited only the wealthy.

Meanwhile, scrapping the £1m lifetime allowance was seen as another “much-welcomed” simplification for pensions.

The paper said the measures would simplify the savings arena: “Gone would be the ludicrous complexities such as the high earners tax taper.

“[The proposals] should also leave the Treasury with the scope to realise a net savings of at least £10bn per year (perhaps for a deficit reduction).””

Click here to read the full article.

Date Added: Monday 1st May 2017