A Labour government would restrict higher-rate pension tax relief for incomes of more than £100,000, it has been suggested.
This could encourage a number of people to look into equity release plans as a way of boosting their retirement income.
During last week’s televised election debate, prime minister Gordon Brown said: "Our four-year deficit reduction plans include a rise in the top rate of tax above £100,000, taking away pension tax reliefs for those above £100,000 at a higher rate and a National Insurance rise."
However, this represented a change when compared to the Labour Party’s current proposals to cut the tax relief for those earning more than £130,000.
The party’s press office told Money Marketing that Mr Brown has just had a "slip of the tongue", but the prime minister repeated the suggestion during an interview with the BBC’s Jeremey Paxman later that week.
Tom McPhail, head of pensions research at Hargreaves Lansdown, told Money Marketing: "Clearly, the fact that Gordon Brown stated that higher-rate pension tax relief will be cut for people earning over £100,000, then reiterated that message means we have to assume that if re-elected Labour will cut tax relief for those earning over £100,000."
A number of people approaching retirement age could now look into lifetime mortgages, which can provide a homeowner with a regular income, as a way of boosting their retirement funds.
Posted by Christian O’Leary
