The coalition is not afraid of the moneyed classes, or Peter Mandelson’s ‘filty rich’.
Tax relief on pension contributions is to be dramatically cut. The allowance will be decreased from £250,000 per annum to £50,000 and the pension cap will fall from £1.8m to
£1.5m and retiring workers could be taxed at 55 percent on any sum above that sum. These changes will save the Treasury £4bn per annum, mainly by limiting how much of a bonus pot or a
windfall can avoid income or capital gains tax.
The Telegraph describes the move as a ‘raid’ on the ‘squuezed middle’, which is not strictly true. The previous governnment made similar plans and this is a re-worked formula designed not to penalised middle Britain. Reducing the threshold to £50,000 will hit the richest contributors – the Treasury estimates that this will affect people who earn over £100,000 a year.
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