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Pension values 'could fall'
30/04/2008
Millions of Britons could see the value of their pension pot fall because of the changes in the income tax system.
The chancellor has reduced the basic level of income tax from 22 to 20 per cent.
Although this means basic rate taxpayers will have more money to spend, tax rebates on their pensions contributions will be reduced.
This means that whereas they would have had to contribute £78 to make a £100 contribution, now they will have to up that to £80 in order to maintain the same level of deposits.
Pension experts told the Telegraph that the tax changes were "absolutely terrible".
Independent financial advisor Laith Khalaf told thisismoney.co.uk that savers should put extra income gained from tax reduction back into pensions.
Solicitors in Northern Ireland can offer pension planning and income tax advice.
Research from AXA insurance has shown that millions of savers are considering cutting their pensions contributions in order to survive the effects of the credit crunch.
However, according to fool.co.uk the effect of compound interest means that this could have a "dramatic effect" on your eventual pension fund.
Contact us for legal advice
The chancellor has reduced the basic level of income tax from 22 to 20 per cent.
Although this means basic rate taxpayers will have more money to spend, tax rebates on their pensions contributions will be reduced.
This means that whereas they would have had to contribute £78 to make a £100 contribution, now they will have to up that to £80 in order to maintain the same level of deposits.
Pension experts told the Telegraph that the tax changes were "absolutely terrible".
Independent financial advisor Laith Khalaf told thisismoney.co.uk that savers should put extra income gained from tax reduction back into pensions.
Solicitors in Northern Ireland can offer pension planning and income tax advice.
Research from AXA insurance has shown that millions of savers are considering cutting their pensions contributions in order to survive the effects of the credit crunch.
However, according to fool.co.uk the effect of compound interest means that this could have a "dramatic effect" on your eventual pension fund.
Contact us for legal advice
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