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.
Jamieson Financial Management,
Bognor Regis, West Sussex