04 November 2008

Rather than dwell on the painful facts presented by the Taxpayers’ Alliance that show the government’s abolition of Advanced Corporation Tax relief (ACT) in 1997 has cost private pension funds between £150 - £225 billion*, leading UK asset manager, Brewin Dolphin, urges individuals to boost their pension contributions by between 15% – 20% to recover the loss inflicted by the government’s pension raid.

Although many individuals may find the prospect of increasing their retirement savings during a period of high inflation and rising household costs difficult to swallow, Brewin Dolphin says that savers must still consider the long term even when the short term outlook seems bleak.

Brewin Dolphin’s Director of Corporate Affairs, Charlotte Black, says, “The pension raid figure will only get larger each year so rather than dwell on the total loss to pensions, individuals should work out what the raid has cost them personally and increase payments to their pension scheme accordingly.”

Bearing this in mind, Black says that if individuals are serious about making sure their pension is at a level that accounts for the abolition of ACT relief then they have to boost payments by anywhere between 15 and 20 percent. “The alternative is to work from anywhere between one to two years more depending on an individual’s annual earnings and current size of their pension,” says Black, a prospect she does not believe many will find appealing.

The rise in payments of 15 – 20% is derived from Brewin Dolphin’s pension calculator ( http://www.brewindolphin.co.uk/PensionCalculator/Calculator.aspx). Principally designed to show the impact of the removal in 1997 of dividend tax credits on individual pension funds, the calculator assesses how much the abolition of ACT has cost an individual’s pension pot and shows the necessary increases in pension payments needed, or alternatively how many more months an individual must work, to make up the difference. A number of case studies have been compiled on the website and anyone can use the calculator to see the impact on their own pension.

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For further information please contact:

Charlotte Black 0845 213 3331 or

Mike Burgess Hume Brophy 0207 499 8736

*TaxPayers’ Alliance abolition of ACT relief figure:
http://www.taxpayersalliance.com/research/2008/11/new-research-pe.html