The Liberal Democrats will consider introducing a single rate of pensions tax relief of above 20 per cent if they win next May’s general election.
The pledge is included in a draft of the party’s manifesto, published this morning, which Liberal Democrat leader and deputy Prime Minister Nick Clegg has a described as a “manifesto for the next generation”.
It 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 May, pensions minister Steve Webb told Money Marketing he would like to see a single rate of somewhere below 30 per cent introduced, adding that he still needed to convince his party that the move is a good idea.
The document also commits the LibDems to continuing with the new pension flexibility rules announced at the Budget.
The party also proposes establishing a Regulation Advisory Board to reduce uncertainty and remove unnecessary regulation.
It says: “[We will] establish a new Regulation Advisory Board to reduce regulatory uncertainty and remove unnecessary business regulation. We understand that well-designed regulation has a vital role in creating markets and driving investment and will use it, in particular, to promote low-carbon and resource-efficient innovation.”
While the document does not clarify whether this will apply to financial services, the document is only a draft and the party says it wants feedback on the proposals.
It also confirms plans for:
- a ‘mansion tax’ on homes worth more than £2m
- to maintain the pensions triple lock so payments rise in line with earnings, inflation or by 2.5 per cent, whichever is highest
- to raise the income tax personal threshold to £12,500
- to reduce the lifetime pension tax allowance from £1.25m to £1m
- to eradicate the deficit by 2017/18 and reduce national debt as a proportion of GDP “in a way that is fair”