Warning over pension relief plan

THE Government has been warned against making its planned 21% cut on income tax relief on pension contributions, for fear of totally alienating private sector workers.

Financial services giant Standard Life has said that if the current Government carries out its previously mooted plan of reducing the relevant tax relief from 41% to 20% in this December’s Budget, the cost of funding for private savers will increase by as much as 57% compared to the previous year.

The company also said that Fine Gael should follow up on its pre-election suggestion of imposing a 0.6% levy on public sector pensions — in addition to private sector schemes — in order to make them more affordable.