ABI: Pensions tax relief must be protected to boost saving

ABI: Pensions tax relief must be protected to boost saving

ABI: Pensions tax relief must be protected to boost saving

Giving evidence to the House of Lords Economic Affairs Finance Bill Sub-Committee on the recent Budget on Wednesday 20 May 2009, the ABI’s Director of Life and Savings, Maggie Craig, is expected to say:

“The Government’s decision to restrict tax relief on pension contributions for people earning over £150,000 a year could have a damaging impact on pension savings in the UK. The move will also add an extra layer of complexity to pensions, in direct contradiction of the ‘A-Day’ measures introduced in 2006 to simplify the pensions tax regime. While the measure itself will affect only a small number of very high earners, we are concerned that the principle that people who save for their retirement will get tax relief has been breached. Tax relief exists as compensation for responsible people who agree to defer some of their income now, so that they are less reliant on the public purse in retirement.

“The Government and the main Opposition parties must not undermine the principle of tax relief on pension savings any further by continuing to remove tax relief, either now or in the future. To do so would seriously damage public trust and confidence in the UK’s pension system. That would mean less saving overall, and the prospect of a massively increased public bill for looking after people in retirement.”

– ENDS –

Notes for Editors

1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.

3. Maggie Craig gives evidence before the House of Lords Economic Affairs Finance Bill Sub-Committee on Wednesday 20 May 2009.

4. The ABI’s written submission to the Committee is available on the ABI web site, www.abi.org.uk.k

5. An ISDN line is available for broadcasts.

6. More news and information from the ABI is available on our web site, www.abi.org.uk.k