The Treasury says it has “no plans” to scrap pension tax relief for higher earners despite hints about reform buried in the Autumn Statement.
The Financial Times reports in a consultation issued alongside the Autumn Statement it was stated that tax and national insurance contributions relief on pensions was one of the “most expensive” Government commitments at a cost of £48bn in 2014/15.
It said “around two-thirds of the tax relief” goes to higher and additional rate taxpayers and “it is important that resources focus where there is most need”.
Hargreaves Lansdown head of retirement policy Tom McPhail says: “The Treasury couldn’t have been any clearer if they’d written in big red letters: we’re going to take your tax relief away.”
But the Treasury told the newspaper: “We completely reject this suggestion – it is not true. This is standard language used in our publications to explain how we target support for pensions – in this case explaining why we have made a change to the money purchase annual allowance.
“The Chancellor did not announce any further changes to pension tax relief in the Autumn Statement and has no plans to do so.”
In the Autumn Statement the Chancellor announced the MPAA, which restricts the annual amount individuals can save into a pension after they have started to access their benefits, would be cut from £10,000 to £4,000 from next April.