“Cutting the amount of pension tax relief to which workers are entitled will hurt many thousands of modest earners, especially if they are in defined benefit pension schemes,” said Prospect pensions officer Neil Walsh, representing 122,000 professional workers in the private and public sectors.
After strong pressure from Prospect and other organisations in responses to the consultation document, the government has introduced an exemption for people taking early retirement due to ill health. But Prospect still has major concerns about:
- People with enhancements to pensionable service on redundancy, potentially leading to punitive tax bills
- The speed of these changes, which will impose increased administrative burdens and costs on pension schemes
- The impact on uniformed services, including Prospect members in the fire service, whose pension schemes will be particularly impacted.
See the library for Prospect’s submission to the Treasury.