The Confederation of British Industry has hit out at suggestions the Government may reduce pension tax relief, disputing the view that it will only affect the wealthiest.
Some say Chancellor George Osborne may announce a reduction in pension tax relief in his Autumn Statement on 5 December. This could see the maximum annual tax-free pension contribution limit cut from £50,000 to £40,000.
John Cridland, CBI director-general, said: "Lowering the threshold below £50,000 is not a wealth tax, it's an income tax which would hit swathes of middle-income earners."
He said the cut would not just affect the wealthy but those who were business owners or in jobs such as nursing.
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He said: "This would hit small business owners who invested heavily in their own companies in the early years so back-load pension contributions to the end of their working lives, particularly hard. It would also be a major blow to professionals saving in defined benefit schemes- like senior nurses, retail store manager or gas engineers- who get a pay rise or promotion.
"Reducing the tax free limit would fly in the face of the Government's efforts to encourage more people to save adequately for their retirement and its drive to position the UK as a world-leading business investment location."
Mr Cridland also said the Government should do more to encourage growth in the UK via short-term high-impact measures. This could include capping business rates at two per cent and new capital allowances for infrastructure investment.

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