B&CE in pensions plea

The B&CE benefits company is urging the government to introduce tax incentives to encourage people to invest in pensions.

The company, which last year launched construction's EasyBuild stakeholder pension, is proposing a flat-rate tax relief of 30% across the board. It said the present tax regime is unduly skewed in favour of high earners. A flat-rate tax relief would act as a far greater savings incentive to moderate earners.

The B&CE plea came from its insurance and pensions manager John Jory when he gave evidence to a House of Commons select committee that is considering the future of pensions.

Jory repeated the B&CE argument that pensions are far too complex and beset by red tape. "We believe this situation has been exacerbated to the point of crisis by the complexity of the rules governing the sale of pensions."

Jory suggested that, ultimately, individuals would not save enough without an element of compulsion. The goal should be to save about 10% of earnings, with employer and employee contributions. Employers should be given a tax incentive to contribute of behalf of employees.