Pensioners face income cut over levy, industry warns

More than 13,000 pensioners face a cut in their retirement income if the Government does not withdraw the pensions levy in the forthcoming budget, according to an industry survey.

The Irish Association of Pension Funds (IAPF), which represents the pensions sector, says more than half of all private sector defined-benefit pensioners – about 36,000 people – have suffered a reduction in their income as the Government effectively taxed their retirement funds over the past four years.

“Almost half of the balance – 21 per cent of schemes, representing approximately 13,000 pensioners – say they will have to reduce pension benefits if the Government reneges on its promise to halt this grossly unfair savings tax,” the IAPF said.

IAPF chief executive Jerry Moriarty said the Government appears to have forgotten the voting strength of pensioners who "understandably . . . will point the finger at the Government".

The IAPF said a pensioner on retirement income of €10,000 per year would be paying a levy this year of €1,125 assuming the 2014 double levy of 0.75 per cent on a capital value of €150,000.