Some 10,000 people will be hit by the Inland Revenue's proposed £1.4m lifetime limit when the new pension simplification legislation comes into force, according to the National Audit Office.
This is twice as many people as previously suggested by the government, which said 5,000 people were likely to be affected by the limit.
The announcment by the NAO follows chancellor Gordon Brown's decision in December last year to let the Office examine whether the government's estimates were right or not.
While the result of this review might have doubled the number of people who are going to be affected by the limit, the 10,000 figure still seems to be within the government's forecast.
The NAO says: "The estimate of 5,000 people is at the lower end of a range of reasonable estimates."
The news will come as a relief for the pension industry after Brown warned in his December 2003 pre-budget report statement the proposals might be scrapped altogether if the figures did not correlate with the government's estimate.
A spokesperson for Scottish Equitable believes the result will not work as a 'brake' on the Inland Revenue's pension simplification proposal expected to come into effect in April next year, but is more likely to be seen as a "green light" for the government to go ahead with the proposals.
That said, the NAO still questions whether Brown's "1,000 additional people a year" figure is valid or not.
"The evidential base for the estimate of 1,000 additional people a year with funds exceeding the allowance is thin and based on a number of assumptions and roundings which significantly affect the outcome," the NAO adds.IFAonline
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