New taxes on high earners will force decision makers away from workplace pensions, according to three-quarters of delegates at the Corporate Adviser DC Summit.
A poll taken at the event found 74 per cent of consultants said changes announced in last April’s Budget, which would reduce higher rate tax breaks for those earning over £150,000, would be detrimental to all employees irrespective of the size of their pay packets.
Malcom Swatton, international senior vice president of HR at Universal Music, said the Budget changes would affect more than a third of employees working in his company’s London HQ alone, and added the firm was considering moving to cash rewards instead of pension saving for high earners.
“We have not decided what to do yet, but one very real option is not to mess around with all of this [different rates of pensions tax]. It may be too much aggravation and too much risk for those employees, so we’re more likely to keep it simple,” Swatton said.
Nick Burns, managing director of corporate consulting at Blufin Consulting, said: “[The government] has hit high earners in a way that is a badly thought through strategy; it’s an attempt to get money out of people at the high end. We’re talking about whacking the people who make the decisions, so they will look to put money in other areas and they won’t be terribly interested in having conversations about pensions. It will have a bad effect.”