LONDON: Young workers face paying sky high charges if their retirement funds are worth more than £20,000 a year.
A lifetime savings cap threatens to plunge those who have put money away for old age into a tax trap designed for the super rich.
It means white collar workers like teachers, accountants and middle managers face the prospect of being “clobbered” in retirement.
Current rules allow savers to qualify for tax relief by paying £40,000 into a pension each year with a lifetime cap of £1.25million.
When savers withdraw anything above this cap the 55 per cent tax kicks in.
But research shows that many of today’s workers who save prudently for the next 25 years will be stung – particularly as the cap will be worth just £761,914 in real terms by then.
