date: 14 October 2010
embargo: For immediate release
Commenting on measures announced by the Treasury today (Thursday) to restrict pensions tax relief, TUC General Secretary Brendan Barber said:
'The Government is right in principle to limit pensions tax relief for the high paid. There is no way that a limit of £40,000 a year on pensions saving with tax relief can be described as an attack on middle income Britain, as it's almost twice average income.
'However we will need to examine the small print. Like the child benefit cut, the Government's original proposals contained some unfair losses for defined benefit scheme members on modest incomes and we will have to study whether today's announcement deals with these anomalies.
'But this is a big missed opportunity. What we need is a much more serious discussion of pensions and tax relief. At present it costs a higher rate taxpayer just 60p to put one pound into their pension because they get 40p tax relief. But a standard rate taxpayer - the real middle income Britain - gets only 20p relief, so it costs them 80p to save one pound.
'Reform of the tax treatment of pensions savings could unlock billions that could be used to improve pensions for ordinary people. Instead millions of pensioners are facing cuts in income because of the Government's switch to CPI indexing.'
NOTES TO EDITORS:
- The Government's announcement on restricting pensions tax relief is available at www.hm-treasury.gov.uk/press_52_10.htm
- All TUC press releases can be found at www.tuc.org.uk
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Issued: 14 October, 2010