Pensions reform hinted at

 Osborne hints at reforms

George Osborne has hinted that major reforms to pensions taxation will be announced in the March Budget, telling MPs he was “open to consultation on the pensions taxation system at the moment.” The comments, in a parliamentary answer, have dashed expectations of an earlier announcement in the autumn statement in November. It has been widely predicted the government will end the current system, which ensures savers pay no income tax on the first £40,000 a year put in pensions. The system is said to favour wealthy people who reclaim large amounts of income tax while in work and pay reduced rates in old age. Tom McPhail of Hargreaves Lansdown said of the government’s consultation: “The fact that the government wants more time to work on it suggests it is still pursuing fundamental reforms; I believe these are likely to lead to cuts in the tax breaks offered to higher earners.”

Source:   The Daily Telegraph (28/10/2015)