Budget will affect private sector pensions, says ACA

Mon, 27 Apr 2009

Pension tax relief will be restricted for top earners under changes announced in Alistair Darling's annual Budget report last week, but the Association of Consulting Actuaries (ACA) has said that it will affect more people than the chancellor believes.

The new announcement means that those earning over £150,000 will have to pay more tax on their pensions, but ACA believes this will affect the quality of a lot of private sector workers' pension schemes .

Not only will top earners suffer, but lower income workers will also be affected when senior executives begin to cut spending on quality pensions and the Budget announcement does not stand up to scrutiny, according to the group.

Keith Barton, chairman of the ACA, said: "The government seems to have a deft touch in finding policies that have the unintended consequence of damaging quality private sector pension provision ."

Recent research found by Key Retirement Solutions found that over 65s are still paying off their mortgages and are using their pension to do so.
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