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08/05

Government should rethink pension tax relief proposals

Conservative pension proposals could cost some savers up to £13,500 a year

The Tory manifesto pledge to cut how much of the annual contribution someone earning above £150,000 can claim tax relief on would mean that if someone earning £250,000, contributing £40,000 a year to their pension will receive just £4,500 in tax relief, compared to £18,000 currently – a reduction of £13,500.

Portrait of Adrian WalkerAdrian Walker, retirement planning manager at Old Mutual Wealth, comments:

“With Steve Webb among the Lib Dem casualties, it looks likely that the Conservatives will shortly be choosing their new pensions minister. Whoever is chosen, their priority should be to ensure the progressive pension reforms continue sensibly. Any Conservative pensions minister should look at their manifesto proposals very carefully to ensure they do not damage the attractiveness of pensions as a savings vehicle for high earners.‎ ‎

“For higher rate taxpayers concerned that the election result means tax relief on future contributions may be cut back, it is worth considering making additional contributions now while tax relief matches tax paid on income. Carry-forward rules mean that any unused annual contribution allowance from the past three years can be used, meaning an individual could actually make up to £120,000 in contributions.”

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to Editors:

Old Mutual Wealth

Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

It has an adviser and customer offering spanning:

  • Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
  • Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK & Italy* and Old Mutual International globally
  • Asset management solutions delivered by Old Mutual Global Investors
  • Discretionary investment management delivered by Quilter Cheviot.

Old Mutual Wealth oversees £119 billion in customer investments (as at 30 September 2016).

Old Mutual Wealth is part of Old Mutual plc a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £342.7 billion assets under management (as at 30 June 2016).

*Old Mutual Wealth announced the sale of Old Mutual Wealth Italy to Ergo Italia on 9 August 2016. The transaction is pending completion.

This press release is for journalists only and should not be relied upon by financial advisers or customers. Investments may fall or rise in value and investors may not get back what they put in.