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Lib Dems mull flat rate pension tax relief in manifesto

Lib Dem Conference 2011

The Liberal Democrats would consider a flat rate of pension tax relief if elected.

In the party’s manifesto today, alongside a commitment to protect the state pension triple lock for the next parliament, the Liberal Democrats said they would launch a pension tax review to look at how a flat rate might work.

The manifesto says: “We want Britain to be the best place in the world to save for, and enjoy, your retirement. We will…establish a review to consider the case for, and practical implications of, introducing a single rate of tax relief for pensions, which would be designed to be simpler and fairer and would be set more generously than the current 20 per cent basic rate relief.”

Pensions in the higher rate tax band will no longer be entitled to a winter fuel payment under Liberal Democrat plans, but all pensioners will keep their free bus passes.

AJ Bell senior analyst Tom Selby says: “If there is to be reform to pension tax relief, it should be done in a measured way and agreed cross-party. An independent review of pension tax incentives would help foster this consensus, and all parties should commit to not tinkering with the system once any changes have been introduced. The last thing we want is huge reform programme to be introduced by one Government, only to be torn apart by its successor.”



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Govt moves towards flat rate on pension tax relief

The Treasury has moved away from a radical move that would see pensions taxed like Isas in favour of the industry’s favoured flat rate of relief. Chancellor George Osborne is believed to be designing a “hybrid” model with a flat rate set between 25 and 33 per cent, the Financial Times reports. A consultation launched […]


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The Labour party says it will raise at least £4.7bn a year through a financial transaction tax set to hit share dealing and derivatives trading. Shadow chancellor John McDonnell told Sky News yesterday the party was asking for a “small contribution” from the City to help pay for public services. The revenue would be raised […]

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While Trump blazes blond in the political foreground, it’s easy to overlook the economic background to the new political dimension of 2017. Political risk will be a feature of the year: the unpredictable and untested Trump administration has already created uncertainty, which is unlikely to diminish, especially if protectionist rhetoric starts to outweigh promises of […]


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  1. If Mrs May seeks to cap energy prices because people can’t be bothered to get a better rate by fixing, doesn’t the logic follow that she should do the same for mortgages?

  2. Just wait till interest rates go up. Another financial crisis in the making?

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