Pensions have once again been an easy target and individuals with incomes – including pension contributions – of more than £150,000 will have relief restricted by tapering away their annual allowance.
A new green paper questions whether the current system of pensions tax relief appropriately incentivises people to take responsibility for their retirement saving.
The document considers the background of demographic, market and government policy changes, before going on to examine the current tax-relief system.
The government clearly believes an Isa is also a flexible method of saving and is now drawing greater similarities between the two.
The introduction of more ways to save in an Isa, such as using peer-to-peer lending, and the help-to-buy Isa announced in the previous Budget, must be welcomed and it is our view that the reliefs and benefits of pensions and Isas will merge into one long-term savings plan in the coming years.
Jonathan Gain is chief executive of Stellar Asset Management
