Labour/Conservative Pensions changes

Pete111

I'm wondering if any of the MSE pensions experts might be able to assist re the recent pensiosn proposals in the news.

I read that both major parties are looking at making changes to the tax relief on pensions for those earning over 150k - ie toreduce relief to as low as 20%. I am fortunate that in a good year I may make more than this amount but I'm concerned that if I do I may get hammered regarding my pension and the tax payable. My questions are therefore:

1) If I were to earn more than 150k and the relief be paired back to 20% how is the additional tax payable likely to be levied? Will I face a larger income tax bill as part of my tax return? This worries me as it could be sizeble.

2) I assume that finding pays to reduce my taxable income would still be a means to 'officially' stay under the 150k mark (ie salary sacrifice pension, company car provision etc)? I appreciate there is little data on these proposals currently but I do have options here so would be interested in the views of the board.

3) Finally are the current proposals by either party for a cliff edge system at 150k? This seems unduly harsh...!

Any thoughts appreciated

Pete111

kidmugsy

Pete111 wrote: »

I read that both major parties are looking at making changes to the tax relief on pensions for those earning over 150k - ie toreduce relief to as low as 20%.

As far as I know that's only Labour policy. The Conservative and Liberal manifestos will perhaps have something to say on the subject. Also the imminent budget might show Osborne's thinking.

Don't think the £150k is arbitrary: it's a tickle more than Mr Moribund expects to be paid as PM.