A final-salary pensions muddle

People saving into a final-salary pension scheme who are receiving compensation for past discrimination may end up with big tax bills.

Old man doing tax return © Getty Images

The High Court has given some savers a major headache
(Image credit: Old man doing tax return © Getty Images)

The law of unintended consequences strikes again. Pension schemes are warning that thousands of final-salary pension scheme members who thought they had protected themselves from punitive tax charges on their savings could be caught out by a High Court case that was supposed to compensate them for unfair treatment in the past. Savers risk 55% tax bills as a result.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.