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Outcry if relief is axed on pensions

I have read some strange letters in the press from time to time but the one from Michael Royde (Money Marketing, November 21) takes the biscuit

I am intrigued to learn that removing tax relief on pension contributions will not increase taxation for those in final-salary schemes. He obviously seems to work from a different text book from myself but I would respectfully point out that unless the schemes are non-contributory, which are very much in the minority, that at the moment tax relief is very much given on contributions; Indeed it is curious to mention NHS consultants because they pay 6 per cent of pensionable earnings (on which there is, of course, tax relief).

He may be thinking of extra-statutory concession A9 whereby tax relief is not claimed on the NHSPS contribution if a personal pension contribution is paid in addition but this is quite rare and, in any event above what other people are allowed.

I think it is very misleading to describe pensions as deferred pay and I prefer to look on them as pay substitutes, bearing in mind that they normally take the place of salary or wages in retirement, although not always these days.

I think there would be such an outcry if tax relief is done away on pension contributions and, for that matter, if the tax-free lump sum is abolished, that it is unlikely to happen.

BGW Jamieson

Principal

Jamieson Financial Management,

Bognor Regis, West Sussex

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