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Cutting tax reliefs will tarnish golden years for middle income workers

PENSIONS are about to become the preserve of the rich and public servants, with middle Ireland left to depend on the State.

That was the view expressed at a conference, where dire warnings were issued about the removal of tax reliefs.

Next Wednesday's Budget could see the tax relief for putting money into a retirement fund cut from 41pc to 20pc.

The big losers, if this were to happen, would be middle-income workers, according to Adrian Daly of PensionSource.

Mr Daly told the company's annual conference that more needed to be done to encourage people to save for their golden years.

Cutting tax reliefs most certainly is not to way to go, he said.

His views chime with the recent findings of a Milliman actuarial study which found that 550,000 workers would effectively suffer an average pay hit of €800 each if the tax reliefs are reduced.

The alternative, of capping the tax-relieved annual pension that can be built up to €60,000 a year, would hit 27,000 people.

But then that 27,000 contains many people with some serious political clout.

If these people win, only the very wealthy and public servants, with their unfunded gold-plated schemes, would get to have a pension.

Time for some serious thinking on the issue from the Cabinet.

Indo Business