The bustle around public sector pensions has obscured an equally significant,
pensions-related story today: the Sunday Telegraph’s claim that George Osborne is considering sucking £7 billion from the pensions of higher earners. The way
it would be achieved, reports Patrick Hennessey, would be to terminate the tax relief on pension contributions made by those in the 40 and 50 per cent income tax brackets. He adds that the
Exchequer could spend the resulting funds on deficit reduction, or on notching up the basic state pension.
At the moment, it sounds as though this is just one of those on-the-table type deals: an idea being passed around the Treasury, but not yet decided upon. It will certainly require a dose of fortitude — or, perhaps, of foolhardiness — to turn it into reality. There’s already an argument that 40 per cent bracketeers are suffering unduly under this government.
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