Pension legislation ''complex and cumbersome''

The rules surrounding pensions are often difficult to understand, an expert believes.

The need for pension advice may be apparent among many people because the legislation is so difficult to understand, an expert has said.

Yvonne Goodwin, managing director of Yvonne Goodwin Wealth Management Ltd, explained that maximum contribution levels have already dropped to £50,000 this tax year.

"In many cases pension contributions are paid by employers anyway, which means the contribution either gets corporation tax relief at 20 per cent or 26 per cent," she continued.

Ms Goodwin highlighted that this depends on the size of the business, but people who are self-employed - such as contractors - will likely receive tax relief of between 40 and 50 per cent.

The expert added that she believes that individuals who create jobs should not be penalised through the taxation of their pensions.

HM Revenue and Customs recently revealed that it had made some progress in reducing the tax gap, as it fell from 7.9 per cent of liabilities in 2009-10 to 8.1 per cent in 2008-09.