Sackers comments on pensions tax relief announcement

Commenting on Mark Hoban’s announcement on pensions tax relief today (14 October 2010), Eleanor Daplyn, Associate, Sacker & Partners LLP, the UK’s leading pensions law firm said:

 “In general we are upbeat about the new approach to tax relief on pensions contributions and feel it is a significant improvement on both the previous Government’s plans and the Coalition's original proposals.

 “Our main concern is on timing.  Even the Government acknowledges that to introduce the changes from April 2011 represents "a stretching timetable".  However, it seems the need to make the estimated £4bn saving that the tax changes would deliver is paramount.

 “It is a big ask for the whole industry to adapt to yet another new tax regime in under six months.  But the anticipated need to adapt benefits to avoid multiple tax charges will be limited by the higher than expected annual allowance of £50,000 and the three-year carry-forward provisions.  The good news is that technical changes mean it is less likely that the average defined benefit scheme member will face a tax bill on their pension pot.”

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