Tortoise1000 wrote:Do you reckon theyll cut benefits?
Do you mean things like unemployment and disability allowances? Absolutely not.
I'd like the Chancellor to simplify pension contribution rules. They are too complicated. They should take away the limits, and instead just give tax relief at the basic rate. There was a budget a few years back where that was expected, and savers were resigned to the prospect, and then it didn't happen. It would seem fairer, and stop annoying high earners with strange cliff edge effects.
The problem with abolishing higher rate relief is defined benefit schemes, where the employee may not be making any cash contribution at all. It is simply an increase in the liability the employer has to meet in respect of the whole scheme. Abolishing HRR would mean those employees would have to be charged an extra tax bill when they had not received the cash and it could be quite difficult to quantify precisely the benefit they had received in the tax year. Just think of those poor MPs and Civil Servants!
It would be simpler to put a cap on the tax free lump sum and I can't see any reason why they couldn't do that.