Stamp duty penalises pension holders, report warns

Thu, 03 May 2007

Pension holders are losing out as a result of the UK government's reliance upon stamp duty, it has been claimed.

According to a joint report from the London Stock Exchange (LSE), the Investment Management Association (IMA), the City of London Corporation and the Association of British Insurers, the government earns approximately £3 billion from its 0.5 per cent levy on share transactions.

However, some of this comes at the expense of pension holders, the report asserts.

Specifically, it estimates that average company pensions funds have fallen in value by between £6,331 and £11,538 as a result of stamp duty, while stakeholder pensions have dropped by somewhere between £7,540 and 10,389.

"Stamp duty penalises ordinary people who invest in flagship government schemes such as stakeholder pensions, child trust funds and the proposed system of personal accounts," contended Richard Saunders, chief executive of the IMA.

Meanwhile, Clara Furse, chief executive of the LSE, argued the absolution of stamp duty would "boost the country's economic output".

The government proposes to introduce the personal accounts pensions vehicle as part of a new national pensions savings scheme in 2012.

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