Oxera claims stamp duty on shares damages pensions

04 May 2007
The stamp duty imposed on shares is eating away at pensions funds, research from Oxera economic analysts claims.

Savings and investments held by ordinary people, often those set aside for retirement, are being eroded by the 0.5 per cent levy placed on purchases of shares of UK listed companies, the study shows.

The typical occupational pension scheme fund is worth between 1.52 and 2.38 per cent less when the retiree comes to draw their pension for the first time due to stamp duty, the study found.

Meanwhile, young people starting out in life may find the capital in their Child Trust Fund is £202 less because of stamp duty by the time it matures, if the savings are based on equities.

"Stamp duty penalises ordinary people who invest in flagship government schemes such as stakeholder pensions [and] Child Trust Funds," commented Investment Management Association chief executive Richard Saunders.

Mr Saunders accused the government of "giving with one hand while taking away with the other".

This week, a study from Friends Provident found 68 per cent of people believed basic pensions provision would be insufficient to give them a comfortable retirement.

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