Self employed pensions to be capped much lower

Entrepreneurs may watch their dreams of retirement shatter after Government the proposed new cap pension contributions for the year that they plan to retire.  The new proposals are tied into changes that will let top earners still receive 50% tax relief on all of their contributions.

However, if the proposal does continue the contribution amounts will be capped every year at £30,000 to £45,000 which is a large drop from the previous cap of £255,000.  Plans to balance tax relief for those who have high earnings would be tossed aside as a result.

In order for the tax relief to be put into effect though, pension contributions in turn will become restricted.  The concession was designed with the idea of aiding small business owners and entrepreneurs who oftentimes find that their wealth and retirement gets tied into their business.

Campaigners for small business have accused the Government of forcing small entrepreneurs to take the fall in order to protect the pensions of millionaires.

Spokesman for the FSB, Stephen Alambritis, stated that the new regulations would hurt the four million self-employed people that reside in the UK.  This is due to the fact that self-employed people tend to place their money directly into their businesses instead of making large pension contributions.

Alambritis continued to say that in turn they start to make large contributions as they get closer to retirement in order to make up for their short contributions earlier as they try to cement their business into the marketplace.