Budget blow to pensions
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• Drivers paying into personal pension schemes may have to increase their contributions by 15% following the Chancellor's decision to axe tax relief on pension funds.
After two weeks of analysis, companies involved in pension funds have reacted angrily to the changes in the Budget.
The National ' Association of Pension Funds has hit out at the move. "This falls particularly hard on the selfemployed," says NAPF chairman Peter Murray. "A 30-year-old in a personal pension scheme can expect to get 15% less on retirement as a result of this sinful action."
Paul Wopshott, tax partner at accountancy firm Price Waterhouse. warns that any shortfall in funds will depend on the age of the individual. "It is very much the young people who are going to get clobbered," he says. "But then they don't think about it anyway."
The Road Haulage Association believes that a lot of its members with company money purchase schemes (where benefits are linked directly to contributions) could also be affected. It suggests that employees might ask their employers to top up the funds.
For people in final salary schemes, which pay pensions based on service record and the level of salary on retirement, employers could face extra costs. But this is not inevitable: NFC pensions manager Jimmy Walker says he does not expect the company to have to raise its contributions as its fund is in surplus.