Chancellor 'should lower annual pension allowance'

The Chancellor of the Exchequer is being encouraged to consider cutting the annual retirement pension allowance in his next financial Budget.

Rather than taking away the higher rate tax relief that applies to some of the country's pension savers, Friends Provident supports an annual allowance cut by Alistair Darling.

The firm's Chief Executive Trevor Matthews suggests that such a move would have a number of positive implications.

He stated: "Not only will this reduce the admin burden for employers, it will also maintain revenue for the Treasury."

Employer Financial Retirement Benefit Schemes might need to be adopted by some companies if the government's plans for higher rate tax relief go ahead, Friends Provident claimed.

Cash alternatives may also need to be considered, it highlighted.

When it comes to retirement planning, Safe Home Income Plans recently suggested that as many as 32% of consumers may be using the web to guide their decisions.

Posted by David Shuker.