Pensions company Standard Life says if the government plans to reduce income tax relief on pension contributions from 41% to just 20%, the to private pensions will increase by an incredible 57% in comparison to last year.
Describing the the current situation for private sector funding as “woefully inadequate”, Standard Life estimates that private sector workers will be at least “ 3.5 times worse off than their well heeled public sector counterparts when it comes to retirement”.
Chief Executive of Standard Life said “How can we persuade people to save into their pension if it costs them almost 60pc more? Why would you save into a pension when tax relief is offered at a paltry 20pc on your contributions and 49pc is payable on your retirement income? The final straw is that you tell private savers they will have to stump up for the eye wateringly generous public sector pensions of their peers while they save towards a relatively impoverished retirement. The injustice of it towards the private sector is jaw dropping”.
The average public sector pension is about €21k per annum compared with its private sector equivalent of €6k per annum.