Jeremy Hunt’s plan to scrap the lifetime pension allowance to tempt 15,000 of the UK’s wealthiest earners to remain in employment or return to the workplace will cost the Treasury £825m BenGartside reports:
– the total people can save in their pension pot before being taxed – in a bid to encourage older workers to stay in the jobs market or return to the workforce.that if the number of people in employment was 15,000 higher as a result of the policy, it would cost the Government £56,000 per person.
“It’s a pension tax reform that will stop over 80 per cent of NHS doctors from receiving a tax charge, incentivize our most experienced and productive workers to stay in work for longer and simplify our tax system, taking thousands of people out of the complexity of pension tax.” An OBR spokesperson placed the cost per employee at £56,000, taking into account the cost of the tax break, and number of employees forecast to return to work.
Some economist have criticised the cost of the policy and accused the Government of prioritising the wrong issues.: “Increasing the Pension Lifetime Allowance is a massive giveaway and won’t help the vast majority of us save for retirement. Only 1 per cent of workers saved more than the old annual allowance and just 10 per cent were hit by the lifetime limit of £1.1m.
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