This article is wrong as Scott Bamber says.

But it is written a few weeks before a budget in late October where a Government has little room to spend on defence and housing and the regions within the fiscal rules. Tax relief on pension contributions floundered in the past because a simple way for high earners to get round the issue was to duck pension contributions altogether and use sacrifice salary to get paid by pension.

From April 2029, pension salary sacrifice will be gone for all but a small amount of income which is of little importance to the higher-rate tax payers (especially those getting relief at 45%)

Now that it can only be done on £2,000 of income ,  higher contributions are more vulnerable, especially if the concept of the non- contributory pension scheme is abolished and everyone has to from salary to be in a workplace arrangement, It is easy to see this policed by TPR using a revision of the AE rules.

I like Scott Bamber’s post because he is young enough to have some skin in the game, He’s successful enough to be affected by abolishing tax-relief for high earners. Good on you Scott. Thanks too to the author, Philp Inman, a senior journalist.

The philosophical  argument made by Philip Inman is that Pensions no longer do what they were supposed to do. This is true but we have a Labour Government has made a lot of changes to how pensions will work for people.

In future, people will not benefit to a great degree from salary sacrifice, will not shelter inheritances in pension pots and will have to opt-out of default incomes from CDC R-CDC and Guided Retirement. Pension Freedom is not what it has become – or won’t be shortly.

I thoroughly agree with this move by this Government. Pensions should provide a wage in retirement for workers as a means of keeping a workforce from cradle to grave. There are a few private employers that still do this and they include the Railway employers, Universities and Royal Mail.

These are where collective pensions still operate and by and large they are multi-employer with employees moving from one participant to another. In the public sector there is the funded LGPS which again is multi-employer, the Royal Mail is to my knowledge unique in having gone to collective pensions.

Collective pensions are likely to survive as most useful for low and middle earners who do not aspire to wealth, to pots and to having advisers. I am not sure that “pensions” are coveted by most higher rate tax-payers, though they are a much part of the workforce than they used to be.

So I think that pensions (rather than DC pot-savers) could survive the loss of high earner’s who have had their pension contributions capped for some time now. I am sure there would be opting out because they did not get higher rate tax relief.

What would be the loss to the higher-rate tax payer? I suspect there would be howls of anguish from the ABI and Pensions UK but do they really stand for the bulk of members contributing?

If you think the way of unions and many Labour politicians , it is time that pensions returned to their philosophical home ground. Losing tax-relief would poster in big letters the message of the Pension Commission first report, that pensions will in future focus on the 15m who haven’t got enough as a retirement income.

I suspect that it would change pensions from being a route to becoming wealthy to a means of getting deferred pay. Pay does not  generally attract higher rate income tax ;  it appears to go unspent by the rich becoming  a means of IHT payment for those inheritances that are in seven figures.

I think it wrong to blame the rich for ripping off the poor though it may have happened. As Inman points out, we are far enough away from open private sector DB plans for them to be an aspiration among unions, they are seeing collective pensions in a different way. One of the problems with DB plans was that the vast majority of the funding was obscure and far from the transparency of defined contributions. “DC” could become a lot less complicated if it was standardised to a single tax rate on employee payments and a standardised balance between employer and employee contributions

It was always that the “executive section” of a corporate pension gave outrageously attractive terms. Professionals could use S226 individual pensions that were designed for the rich. It is not the fault of one generation of rich people, it is inter-generational- the rich have always enjoyed the bulk of the benefit of  pensions, not least because they live so much longer than the blue-collared workforce.

I have read about avaricious union pension officers who have found ways to line their pockets but if it has happened, I don’t think it is important in today’s argument. What is important that having done away with salary sacrifice and made wealth management with pension pots a lot less attractive, it may be possible now to put an end to higher rate tax relief.

John Healy would save a lot of money and Treasury taxation bombshells (such as the pension freedoms) do not  require consultation. Finance Acts are enacted very quickly.

We could see the impact of the savings within the scope of this Government meaning that some of the spending that Healy and Burnham want to do could happen without hurting the silent majority who still don’t pay higher rate tax pay – or get a proper pension.