PBR: Pension funds to benefit from 45% tax rate

From April 2011, very high earners will now face a 45% tax rate for earnings over £150,000 in order to pay for tax cuts for low earners. Some pension providers believe this change may stimulate increased pension contributions to avoid paying this high rate of tax. John Lawson, head of pensions policy at Standard Life, says: "The UK's highest earners now have an added incentive to shelter their income within a pension. "Longer-term investors may even want to deliberately exceed the lifetime allowance and pay a 55% tax charge, as this may produce a better return than investing in an equi...