HR relief under threat?

StevieJ

Noticed this comment on Hargreaves and Lansdown site, any comments

We have also seen informed comment that pension contributions may not attract relief at more than basic rate in years to come. It might just be fortuitous to make your pension payment now.

MikeJones_2

Hi StevieJ,

StevieJ wrote: »

Noticed this comment on Hargreaves and Lansdown site, any comments

We have also seen informed comment that pension contributions may not attract relief at more than basic rate in years to come. It might just be fortuitous to make your pension payment now.

I've worked in the pensions arena for 25 years now and have heard this comment stated periodically throughout that time - usually around when the budget is due, or leading up to a new tax year.

Another one is whether the tax free element of the cash lump sum from pension benefits will continue to be available.

Nevertheless, it would be prudent planning to consider your pension planning allowing for the possibility that higher rate tax relief may not always be available.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

dunstonh

StevieJ wrote: »

Noticed this comment on Hargreaves and Lansdown site, any comments

We have also seen informed comment that pension contributions may not attract relief at more than basic rate in years to come. It might just be fortuitous to make your pension payment now.

They are quoting me

I have been saying for a long time that its under threat and posted it here as well. It is one of those rumours that does come up from time to time. However, this time round it seems more likely due to the introduction of the NPSS/Personal accounts. The Govt version makes no provision for higher rate tax with the personal account.

So, the assumption is that the Govt wont want to have a difference in their version and personal arrangements and that the abolishment of higher rate relief is the most likely outcome.

Although there are now rumours going around that the personal accounts are going to be put on hold until after the recession.

In the case of HL, unless they are saying why they belief is that HRR is going, I suspect its just a marketing attempt to get people to pay more now.

jamesd

It's the position of the Liberal Democrats that they will eliminate higher rate tax relief, so no surprise that there are rumours about it.

dunstonh

Confirmation that HL were doing it for marketing purposes. The following quote was made to Money Marketing and published on 15th April:

Hargreaves Lansdown pensions analyst Laith Khalaf says: "I do not see why you would need to rush. In the unlikely event that they do scrap the relief I doubt it would apply until next tax year. If they bring it in this tax year, anyone who has made contributions since April 6, will not get higher rate relief anyway."

bloaty

Article on the front page of the Express today about this.