By Claire West
The CBI today responded to the announcement from the Treasury on the restriction of pension tax relief.
The Government will reduce the annual limit on tax-free pension contributions to £50,000 per year, and reduce the lifetime limit from £1.8m to £1.5m.
John Cridland, CBI Deputy Director-General, said:
“Today’s announcement is not as bad as feared. The Government had considered making the annual allowance as low as £30,000.
“It rightly heeded warnings about the impact that restrictive regimes can have on pension saving, and these new proposals are a significant improvement on the approach proposed by the previous government, which was simply unworkable.
“We particularly welcome the Government’s commitment to consult on how to proceed with changes to the lifetime allowance, and to consider delaying this change until 2012.
“It is important now that the Government appreciates the short timescale for implementation and works with companies to provide clarity.”