“Higher rate taxpayers receive 40 percent tax relief and additional rate taxpayers earning over £150,000 get 45 percent relief.
“Contributions from employers boost these amounts further.”
In today’s announcement, the Chancellor will liekly detail that a 25 percent flat rate will be introduced, creating both pensions winners and losers.
Steven went on to explain how these changes could be beneficial for basic rate tax payers but damaging for higher earners: “A basic rate taxpayer on average earnings of £27,000 paying four percent out of take home pay from age 22 through to their state pension age (68) could see the fund from their contributions increase from £319,000 to £340,000.
“But a higher rate taxpayer aged 35 earning £60,000 paying the same four percent from take home pay would see the fund from their contributions fall from £424,000 to £339,000 – a fall of £85,000.