The shadow secretary of state for work and pensions, David Willetts has spoken out about his fears over new pension proposals. The Government review of pensions is likely to include an overall lifetime limit that one person can contribute. The figure mentioned is £1.4m.
According to Government figures, only 5,000 people would be disadvantaged by this lifetime limit. Mr Willetts believes it will be far more people, even as many as 600,000. Mr Willetts believes that the limit should be set at nearer £1.7m to allow the majority of people to convert that pot of money to an income equivalent to two thirds of their salary.
Our View
Whilst £1.4m may seem pie in the sky to most of us it will gradually affect more and more people as the years go on, if the limit is not raised. To contribute £1.4m you would have to pay around £2,400 into a pension per month between the ages of 16 and 65 (ignoring any growth or charges).
What we simply cannot believe is that the Government would want to cap anyone's pension. We are in the middle of a massive pension crisis and putting yet more barriers in the way will not encourage the public to save.