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Higher rate tax relief and pensions

(8 Posts)
bitsyandbetty Wed 29-Jun-11 15:14:08

I have a theory that in the next few months, the Government will announce that a review will take place that higher rate tax relief will go on pensions and the MPs Pension Scheme will be reviewed. Timing to be before the other teacher unions vote as this is a major argument. Do you think it will make any difference to the potential strikes in the Autumn if this goes ahead?

I would rather see this and the child benefit change scrapped, even though it will impact on me personally, but if you have money to save in a pension, it means you have spare income so you are one of the lucky ones.

I grew up in a period of strikes and remember the comradarie around it and also the endless lunchtimes being on my own at home from the age of 10 so slightly worried about what may happen. What can the Government do without stopping the pension reforms which Hutton has suggested?

CogitoErgoSometimes Wed 29-Jun-11 17:24:35

I don't think there are going to be any announcements about tax relief of any kind for at least the next couple of years. It would be highly unpopular and counterproductive as the government would be accused of 'pandering to their wealthy friends'.

They're already talking in the current dispute about pensions. The unions may win a few concessions but I suspect that, because they're not fundamentally stupid and because they anticipated this years ago, they'll find a way to make the majority of the changes go through.

Gastonladybird Wed 29-Jun-11 20:27:34

Agree with cogito- they already unwound the higher rate rules and bought in 50k cap. The only proposals on pensions are on non cash funding (ironing out some
Flaws where funding is not made by cash) and dealing with tax for pensioners (ie simplifying it).

I doubt any tax fix will come into dealing with issues on public sector pensions.

CogitoErgoSometimes Thu 30-Jun-11 00:35:29

The other reason the pension proposals will go through eventually is the John Hutton connection. Labour has been unable to either support the strike or effectively oppose the proposals because Hutton, being their man, cleared his ideas with them in the first place.

Earwiggy Thu 30-Jun-11 21:41:43

Cognito - I am confused by your post, how could the government be accused of "pandering to their wealthy friends" if they abolish higher rate tax relief on pensions.

I think this is on the cards, don't know if they are brave enough to do it though as it is the only reason alot of people save anything towards retirement. They won't want to discourage people from providing for themseves thus saving tax payers the bother in later years.

LeninGrad Thu 30-Jun-11 21:43:26

Message withdrawn at poster's request.

CogitoErgoSometimes Thu 30-Jun-11 21:46:02

Higher rate tax relief has already been removed from pension contribs... The OP seemed to think it was coming back. No?

Earwiggy Thu 30-Jun-11 21:50:46

Ahhh, by higher rate you mean 50pc? I think op is referring to the possibility of 40pc relief going too.

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