Nigel Green, chief executive officer and founder of the deVere Group, has urged savers to act now on retirement savings ahead of the overhaul of the pension tax relief system.

He says middle class savers who have been putting money aside for retirement will be hit by the chancellor George Osbourne's plans to introduce a flat rate of between 25 and 35%.

"It is expected that the system that provides individuals with tax relief on contributions in line with their marginal rate of tax will be abolished in this year's budget."

"Those paying higher rates of tax have traditionally been awarded more relief on their retirement savings but it seems this is going to be axed."

Millions of people who currently receive between 40 and 45% relief will see a significant drop in their retirement funds so Green says they must act now.

"With the chancellor expected to announce changes in the Budget in March, the time for higher earners to act is now – take the tax relief while it lasts."

"Those seeking to make larger one-off pension contributions to make the most of their retirement savings might be wise to consider doing so sooner rather than later."

Green says the "attack" on pensions illustrates that the government views retirement savings as an easy target.
It's easy for the government to make the case, he says, because there is a great deal of money in them and most of it belongs to the better-off part of the population.

It's a move that Green says is "short-sighted".

"We should be incentivising now more than ever as retirement planning increasingly becomes a personal responsibility and as the country needs a financially secure older population for its long-term sustainable economic growth."

First published 21.02.2016

Lindsay.sharman@wilmingtonplc.com