Paying the price

Gordon Brown became a master of stealth taxes aimed at extracting billions of pounds from pensions during his time at the Treasury. And yesterday Ministers announced further plans to claw more cash into the Treasury's empty coffers by slashing the amount of pension savings on which people receive a tax break to less than a fifth of its present level.

The move, designed to save 4bn a year, will hit about 100,000 people, mainly higher earners. The plans modify complex changes unveiled by Labour which were attacked by the pensions industry. Nevertheless, they represent another assault on people saving towards retirement.

Already many future pensioners have seen their retirement savings eroded by poor stock market performances and the decision of various major employers to close final-salary schemes.

Staff working in the public sector, who receive pay-outs of less than 6,000 a year on average, will find out next year how they will be hit by plans to tackle a pension fund black hole estimated at 1trillion amid expectations their final salary schemes will also

be abolished.

The future for pensioners is bleak. All will have to work longer as well as pay more into pensions and get less in return.

The Government should be looking as a priority at incentives to encourage those on lower and middle incomes to save for retirement. Otherwise, future generations will pay an even greater price.