Pensions dividing line

SIR – At first I had doubts about Rishi Sunak and his team. Then came this week’s Budget and the abolition of the lifetime pensions allowance, and I thought: “May this be the first of many bold moves.”

Then came Labour’s reaction and I thought: “Here’s clear blue water between the Conservatives and the socialists.”

Ian King

Goring-on-thames, Oxfordshire

SIR – The removal of the pension lifetime allowance is to be commended as a (sadly, all too infrequent) step towards tax simplification.

The annual allowance is an effective way of limiting the amount of tax rebates on pension contributions, whereas the lifetime allowance was simply a tax on investment growth.

Those who think that this is an expensive tax giveaway may not be aware that the Chancellor has also frozen the pension commencement lump sum (or 25 per cent tax-free lump sum) at £268,275. Over time this will limit the cost of pension tax rebates as more and more pension withdrawals are taxed at a marginal rate of income tax and the now-capped pension commencement lump sum is eroded by inflation.

Robert Stratton-brown

Midhurst, West Sussex

SIR – Dominic Shelmerdine (Letters, March 16) thinks Jeremy Hunt delivered the best Budget he could in the circumstances.

However, these “circumstances” are the creation of successive Tory governments over the past 13 years – including the present Prime Minister during his time as chancellor. George Kelly

Buckingham