Here’s a story that provokes mixed feelings.
On one hand, the Tories are hitting middle-income workers, who will discover how it feels to be persecuted by a government many of them supported into office. How are you enjoying the betrayal, folks?
On the other, this is the end of a tax avoidance scheme and This Blog should support such moves.
However, one must question why George Osborne has decided to attack a scheme involving the pensions of people earning only moderate amounts, when there is at least £30 billion (possibly as much as £120 billion) being avoided every year by his super-rich business cronies.
Is he allowing his personal associations to interfere with his work as a government minister?
Perhaps we should draw our own conclusions about that.
Middle class savers could lose up to a third of their pension pots if proposed changes to tax relief go ahead.
Chancellor George Osborne is trying to save billions by cutting the amount of tax relief the Government offers.
But analysts have warned potential changes would hit middle income workers hardest, and could see them miss out on tens of thousands of pounds.
Critics have labelled the plans a ‘stealth tax’, which could have a ‘disastrous effect’ on whether people can afford retirement.
A 40-year-old earning around £50,000 a year stands to miss out on up to £175,000 by the age of 65 if Mr Osborne scraps the tax relief perk altogether.
Other options being considered would see the same worker losing out on between £44,000 and £110,000 by the time they retire, according to pension provider Fidelity. Currently, workers earning £42,385 or more – higher rate income tax payers – receive a tax-free boost of £2 from the Government for every £3 they save into a pension.
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