Thursday 14 October 2010

My goodness, a sensible cut from the coalition!!!

People who know these things have long scratched their heads over why, in these straightened times, we award billions and billions in tax relief on the pensions of the most wealthy. At the moment, and individual can save £255,000 a year in a pension before paying any tax.

Why? Why are government effectively giving money to people who can afford to save £255,000 a year? This is not their earnings remember, this is the amount they have spare.

It always seemed a ridiculous feature of our tax system to me that someone working paid tax on anything they earned over 6 or 7 grand, whilst people paying into a pension didn't pay tax until 255 grand!!
Well, amongst all the awful, awful news of the last few weeks, someone, somewhere in the coalition has finally heard the clamour.

They have made the utterly sensible decision to find 4 Billion a year, simply by slashing the tax free level right down to £50,000.

An almost painless cut that only affects the extremely wealthy (and still will - remember you need to have just over 4k a month spare to save towards retirement even if the level is set at £50,000)
Now, if they look at closing the loophole that means millionaires pay no VAT when they buy a luxury yacht, even I might start to re-evaluate their idea of fairness.......

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