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Pension grab could raise £2.9 billion a year

This week's budget saw Alistair Darling target Middle England pension schemes with a move which will tax UK pension contributions for those earning in excess of £150,000 a year. On average, those earning more than £150,000 a year in the UK (currently around 290,000 people) will be £10,650 a year worse off when the new tax regime comes in.

However, this scheme has been well structured as it will take three years before the full effects are felt which will then see much of the blame and concern passed on to the next government, which could be a Tory party administration. It also begs the question as to whether the Conservatives will be brave enough to reject and cancel the new move, creating a substantial hole in the government budget, or will they be willing to take the short-term pain.

When you consider that after the introduction of the new 50% tax rate and various other adjustments to the UK tax regime, it is forecast that high earners in the UK will be paying tax of 61.5 pence in the pound, is this really fair?

If nothing else the significant rise in UK income tax, which goes against the Labour Party's 2005 manifesto pledge, has reinvented class war across the UK which should make for interesting reading in next year's general election.

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