Scrap higher rate pension tax relief says, LibDem cabinet minister

Danny Alexander, the chief secretary to the Treasury, wants to get rid of higher rate pension tax relief. Find out more here.

By Charlotte Beugge

One of the most senior Liberal Democrats in the cabinet, Danny Alexander, is in favour of stopping higher rate taxpayers getting 40% relief on their pension contributions.

In an interview in the Daily Telegraph, Mr Alexander, the chief secretary to the Treasury, says: "If you look at the amount of money that we spend on pensions tax relief, which is very significant, the majority of that money goes to paying tax relief at the higher rate."

He argues that stopping higher rate tax relief on pension contributions could save £7 billion a year - and even if it was restricted to those earning more than £100,000 it would save £3.6 billion.

Currently higher rate taxpayers get 40% tax relief on their pension contributions, meaning it costs them £60 to make a contribution of £100 into their pension.

However, the newspaper says that the chancellor George Osborne would strongly resist any calls to scrap higher rate relief.

Alex Davies, head of pensions at Hargreaves Lansdown, states that his firm believes "it's unlikely, although not impossible" that the relief will go, saying it would "fly in the face of the simpler rules put in place last year giving most people a £50,000 annual allowance".

Pensions

Scrap higher rate pension tax relief says, LibDem cabinet minister

Related articles

Keep informed

How many will retire on less than the minimum wage?

Scheme deficits could eat up £750bn of companies' total cash

Public sector workers strike again over pensions

Pension schemes '£172 billion in the red'

Meet the Team

Home

Types

Guides

Providers

News

About Us

Keep in touch