The National Association of Pension Funds (NAPF) has urged the Government to simplify its approach to pension tax and radically reduce the annual allowance for tax-favoured pension contributions from the current limit of £245,000 to a range of between £45,000 and £60,000. The association believes this will allow the Government to raise additional tax revenues.
The NAPF represents 1,200 workplace pension schemes in the UK with 15 million members and assets of £800 billion.
NAPF Chief Executive Joanne Segars said:
"The next twelve months will be critical for UK pensions. It is essential that the Government makes the last Budget of this Parliament a Budget for Pensions.
"As recession-hit companies assess the cost and complexity of the pensions they offer their employees, the Government must abandon its unworkable pension tax plans that will only serve to damage pension provision.
"The NAPF's simpler approach to pension taxation will avoid the arbitrary and unfair effects of the Government's proposals - too many people outside the Government's target income group are at risk of facing high tax bills just for saving in a pension scheme."
To read the NAPF proposals, visit the NAPF website.
** UK Tax Law: Additional Information & Advice **
Alternatively, you may want to speak with a solicitor who specialises in tax law.