Government must rethink pensions tax plans, says NAPF

The Government must stop its plans to change pensions taxation for high earners, look carefully at the threat they pose to wider pension provision, and listen to the pensions sector's alternative approach.  This is the message given in the NAPF's response to a Government consultation today.

The NAPF believes that the Government's proposals will affect people far below the target group of those earning over £130,000 and that this will also result in very high implementation costs for pension schemes and employers.  The proposals also depart from the UK's long-established approach to pensions taxation.

The NAPF has proposed a simpler alternative approach to pensions taxation which would involve radically reducing the annual allowance for tax-favoured pension contributions from the current limit of £245,000 to a range between £45,000 and £60,000. This proposal was first outlined in the NAPF's Budget for Pensions submission3 sent to the Chancellor, last week.

NAPF Director of Policy, Nigel Peaple, said: "We are asking the Government to stop, look and listen.

"The Government should stop its plans to introduce an entirely new approach to pensions taxation for high earners, look carefully at our evidence of the threat posed to other pension savers, and listen to our proposals for an alternative approach.

"The NAPF aims to encourage good workplace pensions for all. Our alternative to the Government's proposals will help achieve this goal."