Low earners to face 60% benefits tax

Low earners who save privately into a pension could have their benefits effectively taxed by up to 60%, under the Government's proposed pension tax credit, writes Kira Nickerson. As of April 2003 the Government will offer to top up the minimum income guarantee (MIG) from £77 to £100 a week. To incentivise people to save and not rely solely on the State, the Government is introducing a pension credit. For example, in the case of an individual who saves up enough in a pension fund to provide £10 of income a week, the Government would supply them with £77 straight off, and only has to provide...