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The Association of British Insurers (ABI) today welcomed the Government’s commitment to simplify the current pensions tax regime from 8 down to 1.

Speaking about the announcement, ABI Director General Mary Francis said:

“Simplifying the pensions tax regime is essential to encourage more people to save for retirement.  We hope the Government will keep an open mind about the level of the lifetime cap until it has seen the results of the NAO study.  But it is essential that decisions are then taken very quickly if April 2005 is to remain a realistic start date.

"We are pleased that the Government has listened to the industry’s recommendations by introducing retrospective protection for the people who have already built up large funds; a reduction in the recovery rate where people exceed the lifetime allowance; and the facility to take any funds that exceed the lifetime allowance as a lump sum (once recovery charge has been applied)."

Notes

1.      The ABI was responding to ‘Simplifying the taxation of pensions: the Governments proposals’.

2. Enquiries to: 

Alan Leaman                020 7216 7440 (Mobile: 07957 482330)

Emma Quantrill            020 7216 7392 (Mobile: 07712 841183)

Malcolm Tarling            020 7216 7410 (Mobile: 07776 147667)

Lucy Butler                  020 7216 7411 (Mobile: 07712 841184)

3. The ABI is the trade association for Britain’s insurance industry. Its more than 400 member companies provide over 97% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold more than a fifth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

     4.  An ISDN line is available for broadcasts.