Union slams abolition of dividend tax credits
UK – The leader of Amicus, the UK’s second largest trade union, Sir Ken Jackson, has called on the government to abolish what he calls its “£5bn a year tax raid on occupational pension schemes” by re-introducing tax credits on dividends.
In an article in the Financial Times newspaper, Jackson says Gordon Brown’s decision to remove the credits, which applied to pension fund investments in UK equities, in his first budget in 1997 was a mistake that had put schemes in a “financial nightmare” from which they still haven’t recovered.
Jackson says the move had a far-reaching negative impact on pension funds. “The reality is that, partly through unforeseen bad timing, the £5bn figure quoted as the toll on occupational schemes was not only the catalyst to the problems we are seeing today but it is a continuing drain on our funds,” he comments.
Jackson claims that if the government fails to re-instate the tax credits, retirement benefits and income will decline, as well as the numbers of people taking out occupational schemes. “Without it the tax_credit, the government will undermine its own laudable aim of increasing the numbers of those able to provide for their own retirement.”