Labour sets out its raid on pensions


From The Daily Telegraph :

Labour sets out its raid on pensions: how you should adjust your savings plans

Ed Miliband has announced some major pension reforms that the Labour party will introduce if they are elected into power in May

What are Labour’s plans for pensions?

Labour has for some time said they will scrap the “additional rate” taxpayers’ 45pc relief. Today they have confirmed they will do this and use the savings to pay for a reduction in university tuition fees from £9,000 to £6,000 – a move which they claim will reduce the burden of debt for graduates. They have also pledged to raise maintenance grants for students.
This plan involves cutting back tax relief for very high earners – those earning over £150,000 so that they only qualify for 20pc tax relief. The raid will mean earners with salaries between £150,000 and £180,000 a year progressively lose tax relief on pension contributions – the more they earn they more they lose.
So instead of getting their pension contributions boosted 45pc by the Government, they will get a 20pc boost – the equivalent to the relief paid to basic rate taxpayers when they save into a pension.
There are around 300,000 additional rate taxpayers in the UK who would be affected by this change.

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