NAPF urges government to reform pension plans

Fri, 26 Feb 2010

The National Association of Pension Funds (NAPF) has told the government to discard its new proposals on the tax treatment of pensions contributions .

In a message delivered to the Chancellor prior to next month's budget, the NAPF proposed what it considers to be a simpler and fairer approach to the taxation of pensions .

The association urged the government to radically reduce the annual allowance for tax-favoured pension contributions from the current restriction of £245,000 to a range of £45,000 to £60,000.

According to the organisation, this would work with the grain of existing pensions policy and allow government to raise additional tax revenues.

Joanne Segars, chief executive of NAPF, claimed that the government's proposals "will only serve to damage pension provision in the round".

She added: "Our simpler approach to pensions taxation will avoid the arbitrary and unfair effects of the government's proposals - too many people outside the government's target income group are at risk of facing high tax bills just for saving in a pension scheme ."

The NAPF has 15 million members and assets worth around £800 billion.
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