Tax relief on pensions is reduced

The Treasury has unveiled plans to cut the amount of tax-free income people can put into a pension.

The annual limit is be cut from £255,000 to £50,000. Ministers say the measure will raise £4bn and that 80% of those affected earn more than £100,000 a year.

Tom McPhail at investment advisers at Hargreaves Lansdown said the reduction in allowance is not as bad as it first appeared.