The Government has made a startling announcement that a staggering 650,000 people will not be any better off if they save into a pension personal account. The pension minister James Purnell said that the government expects 6 per cent of ‘pension benefit units’ will face ‘100per cent withdrawal in 2050’.
Head of Pensions at Scottish Life, Steve Bee sees this a 100per cent tax on savers and says that given the figures mentioned, 650,000 people will see their savings go up in smoke as it will all be clawed back through a reduction of means-tested benefits. Mr Bee believes that people could save up to £25,000 and be no better off than somebody who didn’t bother to save. He is also in agreement with the Institute of Actuaries’ to attack the weakness of the pension reforms if the Government fails to acknowledge the issues around means-testing benefits. If the Government feel that it is acceptable for some people to lose out for the benefit of others they should declare this in order to avoid claims of mis-selling.
Our view
The financial burden of our expensive and inefficient benefits system is killing this country. Any sound minded entrepreneur or worker should ‘upsticks’ today and trade back into the UK from an EU nation or set up their business totally in an offshore low tax jurisdiction. Contact us today about the lowest taxation places to work from or live in and still trade back into the UK.