Why 40% tax payers will get to keep their pension tax relief

Higher-rate taxpayers are unlikely to lose the tax breaks on their pensions in this year's Budget, no matter what the LibDems may want.

I'm not sure I can bear to add anything more to the mansion tax debate, so I'm going to ignore it this week. But the alternative idea being floated - the removal of pension tax relief (still!) - by the LibDems as their price for allowing the Tories to dump the 50% top tax rate deserves a little attention.

The first thing to note is that the question of tax breaks for pensions is something that needs to be dealt with really fast. It comes up pretty much every Budget, and incentivises behaviours that I am sure are not meant.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.