Pensions relief changes 'totally at odds with incentives to save'

The Government's changes to tax relief on pension contributions remain "totally at odds with incentives to save", the Chief Executive of the National Association of Pension Funds (NAPF) said today.

Joanne Segars was commenting as the Finance Bill reached its remaining stages in the House of Commons.

Government amendments to the Bill yesterday saw modest concessions intended to address some concerns about the ‘anti-forestalling' regime that will cover the next two years before the new system is introduced in full. However, the NAPF still has deep reservations about the policy direction as a whole.

Ms Segars acknowledged that "adopting a more flexible approach to ‘irregular' contributions will make a difference for some groups of savers. However, the NAPF remains very concerned about the Government's plans when the Budget changes are introduced. The proposed tax changes are expected to undermine incentives to save and may persuade key corporate decision-makers to abandon workplace pension provision altogether.

"In the current economic downturn, saving today to meet tomorrow's needs is more important than ever. We strongly encourage Ministers to listen and engage, reopen the debate and begin the search for more workable solutions than the current proposals."