The Liberal Democrats have promised to embark on a review of plans to introduce a single rate of pensions tax relief.
The policy, unveiled today in the Lib Dem manifesto, commits the party to an investigation of plans long demanded by pensions minister Steve Webb.
The manifesto says: “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 which would be set more generously than the current 20 per cent basic rate relief.”
In addition, the party has committed to pressing ahead with introduction of new pension freedoms in 2016, which will allow for the creation of a second hand annuity market.
Labour has promised to introduce a new ceiling of £30,000 on tax free annual contributions to pensions, while both parties are seeking to limit tax relief available to those earning more than £150,000.