In 2001, we held our heads in our hands as the government made the decision to slash the annual allowance from a hefty £255,000 to a paltry £50,000.
At the time consultation papers suggested that the annual allowance could be cut even lower and lo and behold, the chancellor used the Autumn Statement to wield his axe and reduce it to £40,000.
The Treasury has estimated that 160,000 people a year will be affected by the decision to lower the maximum cap.
Despite much speculation that pensions would be hit, the announcement was still a disappointing blow to the retirement industry and will do nothing to encourage individuals to explore the option of a pension.
For some time now, the government has been banging the drum on saving, amid fears that a whole generation will hit retirement with no pennies in the bank, but this would seem to signal the opposite.
Far from being an attack on the very well-off, this decision will impact middle-income earners too.
In my view, this ongoing tinkering with pensions only serves to put people off and is contrary to the objective of encouraging people to save and be responsible for themselves in retirement, rather than rely on the state.
Lisa Webster
Senior technical consultant
Hornbuckle Mitchell
Leceister
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