This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/uk-35732604
The article has changed 13 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Pensions: George Osborne to drop tax relief plans | Pensions: George Osborne to drop tax relief plans |
| (about 2 hours later) | |
| Chancellor George Osborne is to drop plans to change the system of tax relief on pensions. | Chancellor George Osborne is to drop plans to change the system of tax relief on pensions. |
| An Isa-style scheme would have ended tax relief on contributions, but made pension pot withdrawals tax free. | An Isa-style scheme would have ended tax relief on contributions, but made pension pot withdrawals tax free. |
| Mr Osborne was due to unveil the plans in the 16 March Budget, but was warned it could cause a run on savings. | |
| The proposal - to make savings from the £21bn tax relief bill - had been opposed by pensions minister Baroness Altmann and Conservative MPs. | |
| A Treasury source said now was not the time to make changes to pension tax relief. | A Treasury source said now was not the time to make changes to pension tax relief. |
| BBC political correspondent Eleanor Garnier says the decision is a recognition of how fragile the EU referendum campaign is - avoiding the changes removes the risk of upsetting voters ahead of the vote in June. | BBC political correspondent Eleanor Garnier says the decision is a recognition of how fragile the EU referendum campaign is - avoiding the changes removes the risk of upsetting voters ahead of the vote in June. |
| The chancellor had been considering two options - the other being a flat rate of tax relief for everyone saving for a pension. Those who pay higher rates of tax currently get bigger breaks. | |
| An ally of the chancellor told the Times: "George has always been clear he wouldn't do anything to damage saving. | An ally of the chancellor told the Times: "George has always been clear he wouldn't do anything to damage saving. |
| "He's listened to what people have said and concluded that now isn't the right time, with uncertainty in the global economy and reforms such as auto-enrolment still bedding in, to turn things on their head. | "He's listened to what people have said and concluded that now isn't the right time, with uncertainty in the global economy and reforms such as auto-enrolment still bedding in, to turn things on their head. |
| "It is also clear that employers wouldn't welcome a wholesale change in the way they administer schemes. So he is not going to tear up the system of pension tax relief. There won't be any changes to tax relief at all in the budget." | "It is also clear that employers wouldn't welcome a wholesale change in the way they administer schemes. So he is not going to tear up the system of pension tax relief. There won't be any changes to tax relief at all in the budget." |
| Industry opposition | Industry opposition |
| Baroness Altmann made clear she was opposed to the idea, and there was the threat of resistance from Tory MPs worried about the effects on their constituents, potentially costing higher-rate taxpayers thousands of pounds from their retirement income. | Baroness Altmann made clear she was opposed to the idea, and there was the threat of resistance from Tory MPs worried about the effects on their constituents, potentially costing higher-rate taxpayers thousands of pounds from their retirement income. |
| The pensions minister said: "The freedom and choice reforms have put us in a place where people's pensions can work well for them. | The pensions minister said: "The freedom and choice reforms have put us in a place where people's pensions can work well for them. |
| "However, tax is a natural brake on them spending their pension fund too soon." | "However, tax is a natural brake on them spending their pension fund too soon." |
| The proposal, which would have been announced in Mr Osborne's Budget on 16 March, had been opposed by the pensions industry. | |
| Yvonne Braun, of the Association of British Insurers, said the scheme would have hit current savers and could have created a "fiscal time bomb" for future generations. | Yvonne Braun, of the Association of British Insurers, said the scheme would have hit current savers and could have created a "fiscal time bomb" for future generations. |
| She said: "Many savers would be worse off and it would also damage the economy more widely because of its impact on saving and investment." | She said: "Many savers would be worse off and it would also damage the economy more widely because of its impact on saving and investment." |
| Changes to the pensions system in recent years have included automatic enrolment into workplace pensions in 2012 and people aged 55 and over being allowed to take their retirement pots how they want rather than being required to buy an annuity retirement income introduced in 2015. | Changes to the pensions system in recent years have included automatic enrolment into workplace pensions in 2012 and people aged 55 and over being allowed to take their retirement pots how they want rather than being required to buy an annuity retirement income introduced in 2015. |