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Diggle tells meeting pension tax reliefs are &#39unsustainable&#39

The current structure of tax relief on pensions is “unsustainable” as it primarily benefits the wealthy, according to senior Inland Revenue civil servant Paula Diggle.

Head of savings and pensions policy Diggle made the comments at a closed Revenue workshop in Worthing attended by a number of industry figures.

The meeting was scheduled to deal with issues surrounding self-invested personal pensions and small self-administered schemes but quickly diverged into a wider discussion about Government pension policy.

Diggle pointed to the fact that 40 per cent tax relief is enjoyed by 5 or 6 per cent of the population, a situation she called unsustainable, but she would not be drawn on the Government&#39s plans for reform.

IFA Newman Houghton & Co consultant David Brunning says: “I can understand where the Government is coming from but if it is looking to bridge the savings gap it should be looking at making pensions more attractive.”

Downing Street pensions adviser Ros Altman says: “We spend £14bn on pensions tax relief in the UK. Half of that goes to the top 10 per cent and a quarter goes to the top 2 per cent. It cannot be right and, if this Government is not willing to address it, who is going to?”

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