Lib Dems to review single rate of pension tax relief

The Liberal Democrats have released a ‘pre-election’ manifesto, detailing a pledge to establish a review to consider the case for introducing a single rate of tax relief for pensions, which would be set “more generously” than the current 20 per cent basic rate relief.

The party stated that it wants to build on the ‘world-leading’ pension reforms introduced since 2010, by increasing the personal allowance to at least £12,500 by 2020 and pressing ahead with plans to allow people more freedom in the use of their pension pots.

The document also mentioned the introduction of a “simpler” single tier pension and legislating for the ‘triple lock’ of uprating by the higher of earnings growth, prices growth or 2.5 per cent to be made permanent.

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The Liberal Democrats also mentioned raising the tax free personal allowance to at least £12,500 by the end of the next parliament.

It stated that a next step would be to raise the employee national insurance threshold to the income tax threshold, as resources allow, while protecting low earners’ ability to accrue pension entitlements.