Director of life and savings Maggie Craig says: “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.
“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.
Craig says the move will likely be expensive to implement and reintroduce complexity and change to the pension system, only three years after A-Day. She adds that it is vital there is detailed and effective consultation on the implementation of these changes.
She says: “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.”