The Treasury has dismissed suggestions that it is planning to remove higher rate tax relief on occupational pensions contributions.

According to reports, ministers have been considering ending the right of people in the higher tax bracket to claim 40 pence back in tax relief for every pound invested in a work pension scheme.

Government sources have told the Telegraph that the Treasury has been examining the idea for possible inclusion in a Green Paper next month.

Forum Response: National Association of Pension Funds

A spokesman for the NAPF told ePolitix.com: "At a time when the government is looking to increase contributions and reduce red tape, this proposal shouldn't be on the table. Removing higher rate tax relief from contributions to occupational pension schemes would actually increase red tape, and reduce contributions."

Forum Response: Institute of Directors

Derek Brownlee, tax executive for the IoD, told ePolitix.com: "We welcome reports that the Treasury will not be removing higher rate tax relief for pension contributions. The government needs to encourage people to save more for their retirement, not less.

"Removing the higher rate tax relief would force millions of people to put more money into their pension funds just to maintain the value of their pensions.

"Of course, many people wouldn't - there is no evidence that people increased their contributions to compensate for the removal of the tax credits in 1997, and pension funds in the UK are £5 billion a year worse off as a result.

"Ultimately, if pensions become less attractive to save in - and removing tax reliefs is certain to make them so - then more people will be reliant upon the state in retirement, and that will lead to higher taxes in the future."