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High earners face tax bills on final salary pensions
Photo: Getty Images
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A little-noticed change in the rules rushed through Parliament before the
election will come into affect in April 2011.
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Currently, workers with final salary pensions do not carry a tax burden on the
money they are paid out on retirement. But from April next year, those
earning more than £150,000 will have to pay a tax bill based on their age,
length of service and salary.
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Many do not typically pay into a scheme during their working life but receive
a pay out during retirement.
As well as large sector private companies, many of the people affected will
work for the public sector which offers gold-plated final salary pensions.
They include Sir Gus O’Donnell, head of the civil service earns up to £239,999
and faces an annual tax bill of £26,000 as a result of the changes,
according to calculations carried out for the Daily Telegraph by accountants
Grant Thornton. …
Read the original article at Telegraph
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