Tax relief

Advisers should act now to use ‘carry forward' to protect clients' tax relief on pension contributions ahead of the top tax rate cut, according to Suffolk Life.

Labour backbencher David Miliband has called for the government to cut pensions tax relief to £26,000 to match the national average wage.

High earners would face a £1bn ‘tax grab' on their pension contributions to fund return-to-work schemes for the long-term unemployed should Labour return to power.

The Chancellor has announced cuts to pensions tax relief from 2014/15, meaning individuals will only be able to put away £40,000 annually free of tax.

Further changes to the tax relief available on pensions - as has been predicted ahead of the Chancellor's Autumn Statement this week - may destroy public faith in saving for retirement, according to financial services consultants Punter Southall.

Few people are prepared to save enough of their salary in a pension to achieve a comfortable retirement despite knowing the 8% auto-enrolment minimum is not enough, a Friends Life survey has found.

The well-off are receiving tax breaks on pension contributions worth on average 20 times those of ordinary workers, according to reports.

Industry experts are "horrified" that the Liberal Democrats are considering cutting tax relief on ISAs and pension contributions for the wealthy.

RETIREMENT

People who are will to pay into a pension but have not got around to signing up are collectively losing out on £2.5bn in income tax relief on contributions, analysis has found.