§ Mr. LoveTo ask the Chancellor of the Exchequer (1) what estimates he has made of the impact on public funds in tax relief of the introduction of the £1.4 million limit on pension savings; and if he will make a statement; [186635]
(2) what estimates he has made of the cost to public funds in tax relief of introducing a limit on pension savings of (a) £1.3 million, (b) £1 million, (c) £750,000, (d) £500,000 and (e) an amount reflecting a pension just above benefit levels; and if he will make a statement. [186636]
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§ Ruth KellyAvailable estimates of the Exchequer cost of the introduction of the new simplified tax regime for pensions are contained in paragraph 48 of "Simplifying the taxation of pensions regulatory impact assessment", a copy of which is available in the Library of the House.
The £1.5 million lifetime allowance to be introduced from April 2006 broadly replicates the maximum fund an individual can accrue under the current occupational pension rules. The exchequer impact of introducing a lower allowance would depend upon uncertain changes in the pensions savings of individuals at or approaching the lower lifetime allowance and any consequent changes to other parts of the new regime resulting from a lower allowance. Due to the uncertainty of estimating the size and direction of these behavioural effects no estimates are available.