New pension rules will only benefit wealthy

New Government rules to allow people to buy homes with their pension fund will only benefit the very rich, a report warns today.

Industry experts estimated that the Treasury will give away more than £2billion a year in pension tax breaks when the changes come in next April.

But market analyst Datamonitor said that while the move would boost those with a pension fund of more than £75,000, ministers were doing little to confront the pensions crisis

facing millions on average

incomes. Self-Invested Personal Pensions (SIPPs), a specialist pension favoured by the rich, will as a result increase from £1.4billion in 2004 to £4.6billion a year by 2009, the report found.

The revelations came as Gordon Brown stamped quickly on suggestions from two influential Blairites - Anthony Giddens and Patrick Diamond - to, in effect, create a new form of inheritance tax.