Budget 2009: Tax relief for high earners restricted

Published on Wednesday 22 April 2009 15:17

THE Chancellor today announced plans to restrict tax relief on pensions for people earning more than £150,000.

Alistair Darling said from April 2011 the amount of money the Government contributed to the pensions of high earners through tax relief would be gradually tapered so it was the same as the 20% rate the majority of people receive.

Mr Darling said that while it was important to encourage people to save for their retirement, he wanted to "address the anomaly" which saw a tiny proportion of workers taking a large slice of the money the Government gives to help people save.

He said: "It is difficult to justify how a quarter of all the money the country spends on pensions tax relief goes, as now, to the top 1.5% of pension savers."