Rich pensioners face 60% tax charge
High earners will face pension tax charges of up to 60% through government plans to simplify the pensions tax system, says the Treasury.
Pensions secretary, Andrew Smith, has proposed a lifetime limit of £1.4m in tax efficient pension plans. Anything above this will be subject to a rate of 60%.
The Treasury maintains that more than 99% of people will benefit from the new measures to be introduced in 2004. The findings come from Lane Clark & Peacock, a firm of actuaries that specialises in pensions advice.
‘Our initial view is that the Green Paper is a disappointment and has thrown ideas back for yet more consultation,’ stated the firm. ‘It is difficult to see how many of the suggestions will encourage employers to carry on running occupational defined benefit schemes.’