PENSION SCHEME members who already lost some or all of their retirement savings when their employers went bust could now also lose out on means-tested benefits if they become eligible for help from the government's £400m rescue fund.
Speculations that this hand-out may affect benefits entitlements mounted yesterday, says The Daily Telegraph, after Work and Pensions secretary Andrew Smith refused to rule it out in statements to the House of Commons.
David Willetts, shadow work and pension secretary, said: "There are 60,000 people in this position. On average they qualify for assistance of less than £7,000. It would add insult to injury if they lost benefits as well."
STAYING IN the world of pensions, The Times reveals that senior executives in the UK may stand to lose an estimated £2.5bn in tax breaks on their pension contributions as their employers seek to minimise the cost of new pension rules.
According to a survey by actuary Watson Wyatt, more than 90% of companies are likely to refuse to fully compensate their senior executives for lost tax breaks under the new lifetime limit coming into force in April 2006.
Under current pension legislation, high earners who joined a company before 1989 can pay unlimited sums into a pension and enjoy tax relief set at 40%.
But when the new rules come into effect, people with a pension pot exceeding the lifetime limit will be hit by a 55% recovery charge.
The average executive could losing £100,000 either through the recovery charge if he stays in the pension or by lost tax relief if he opts out, the Times says.
ON A completely different note, The Scotsman reports April saw Scottish GDP grow at its fastest rate for four years.
Estimates from Inverness-based Mackay Consultants suggest the local economy's output totalled £5.67bn in April this year, up 2.3% on April 2003.
GDP has not grown so strongly since the second quarter of 2000, when a 2.8% leap was recorded.IFAonline
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