Labour 'would cut pension tax relief' This could include reforms where every saver would receive tax relief of 30pc or less, regardless of their income. Previous statements by Mr Balls pointed towards a level of 20pc cap for those earning £150,000 or more. Party leader Ed Miliband has suggested a 26pc level for all in the past. Currently, all income tax is refunded on money paid into a recognised pension scheme, whether at work or a personal plan. Everyone has 20pc basic rate tax refunded immediately. Higher-rate taxpayers can claim back the additional charge on their contributions - whether that is an extra 20pc (for higher-rate taxpayers) or 25pc (top-rate taxpayers) through a tax return form. The changes under consideration by Labour would represent a form of wealth re-distribution. Under current rules, savers can take 25pc of their money in one go, free from any tax, from the age of 55. The Pensions Policy Institute has suggested limiting tax-free lump sum payments to just £36,000.