Annual allowance cut
It would mean cutting the annual allowance very substantially, probably down to around £10,000. It would therefore become extremely difficult for mid to high earners to build a decent retirement pot over their working lives.”
He added: “For a higher earner, it would mean exchanging 40% relief on £40,000 for 20% relief on £10,000; a loss of £14,000, in exchange for a paper promise from a politician which would depend on a future government for its honouring.”
Prime minister David Cameron is understood to have urged Osborne to avoid any drastic overhaul of the pensions system in the run-up to the EU referendum in June.
UK-based BBC current affairs programme Newsnight gave some time to pensions reform this week (3 March).
Speaking on the programme, Willis Towers Watson senior consultant David Robbins said: “This is a policy that brings forward tax revenues from future years when an older population is under more pressure.
“The fear would be that might make future governments more desperate and more likely to renege on the promise that withdrawals from these pension ISAs would remain tax-free.”
