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Prospect asked which taboos should be broken

By Prospect   February 2012

End pension tax relief

Higher rate pension tax relief costs the exchequer at least £7bn a year. There should be tax relief on pensions—the question is whether the rich should get more generous relief than the rest. The defence is that this helps avoid “double taxation,” where a higher rate of tax is paid on pension income than the relief received in the first place. Yet this affects a very few, very affluent people. Given the severity of the cuts, it is staggering that this slice of spending is protected. In this area, as with universal benefits for affluent pensioners,…

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