Private wealth 'affected by pensions tax relief reduction'

Those with private wealth will be most affected by the recent changes in pensions tax relief, it has been claimed.

Alison-Jane Bailey, head of policy and technical development at the Pensions Advisory Service, acknowledged: "The measures will impact high earners", claiming around 100,000 Britons will feel the effects of the changes, which saw the annual allowance for tax-privileged pension saving reduced from £255,000 to £50,000.

The wealth management specialist suggests the majority - around 80 per cent - of those affected for the first time earn more than £100,000 a year, with members of final salary pay schemes among the most likely to be caught by the recent revision.

A reduction in the lifetime allowance brought the total tax-free allowable sum to £1.5 million, down from £1.8 million. This may encourage individuals with private wealth to seek alternative asset vehicles, with socially-responsible investment one possible option.

It is hoped the changes will raise £4 billion per annum and thereby help address the public deficit.  ADNFCR-2318-ID-800120931-ADNFCR