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Pensions tax relief move disappointing day for pension saving

Commenting on the Government's decision to restrict tax relief on pensions contributions for people earning over £150,000 a year, Maggie Craig, the ABI's Director of Life and Savings, said:

"This is a disappointing day for pension saving. Although this move will not directly affect the vast majority of people saving for retirement, we are concerned that it sends a worrying message to pension savers that the Government is now breaking its contract on tax relief. Tax relief is there for a reason - it compensates responsible people who agree to defer some income by locking pension savings away until they retire. That principle was enshrined by Lord Turner in his Government-backed report on pensions in 2006.

"To maintain consumer confidence in the pensions system, the Government must give a categorical assurance that the historic principle of pension savers receiving tax relief on their contributions will not be undermined any further.

"This move is likely to be expensive to implement and will reintroduce complexity and change to the pension system, just three years after the Government's ‘A-Day' reforms. It is vital there is detailed and effective consultation on the implementation of these changes.

"Far too few people are saving for their retirement, and Britain faces a 2050 demographic time bomb when there will be twice as many pensioners for the working population to support - the Government's decision will do nothing to encourage people to save."

Last updated 01/07/2016