The 250% pension tax; Drug money saved banks - papers

Hundreds of thousands of high-earners face tax rates of up to 250% because of the Government's pensions changes.

From April 2011, the Government will withdraw pensions tax relief from those earning more than £150,000

It will do this, in part, by imposing a personal tax charge on higher-earners in occupational schemes when their company pays money into their pension reports The Times.

The level of the tax charge will vary according to earnings: someone earning £160,000 will pay 10%, those on £170,000 face a 20% hit and people earning £180,000 or more will pay 30% on their employer contributions. See story...

DRUGS MONEY saved some banks from collapse at the height of the global crisis, the United Nations' drugs and crime chief claims.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, told the Observer signs suggest some banks were rescued by billions of dollars ‘from the drugs trade and other illegal activities.'

He says he had seen evidence the proceeds of organised crime were the 'only liquid investment capital' available to some banks on the verge of collapse last year.

Costa says as a result, a majority of the $352bn (£216bn) of drugs profits was absorbed into the economics system, effectively laundering it. See story...

THE PRE-BUDGET report pledge to raise the state pension will not apply to some parts of the pension - potentially saving the Treasury £350m in 2010/11, reports the BBC.

The Chancellor said the "basic state pension" would rise by 2.5% in April.

But pensions minister Angela Eagle says extras such as the State Earnings Related Pension (Serps) will be frozen. See story...

RELIEVED INVESTORS sent shares in London surging this morning after Abu Dhabi rode toc's rescue with a $10bn bailout package after almost three weeks of brinkmanship says The Times.

After Abu Dhabi announced the funding to cover the immediate debts of Dubai World, the state-owned conglomerate, the three UK stocks seen as most exposed to Dubai's debt problems - the London Stock Exchange (LSE), Standard Chartered and Royal Bank of Scotland - were the top three performers in a rising London market.

The LSE, whose 20.56% shareholder is the Dubai state-owned company Borse Dubai, was the top gainer, up 7%, or 49.5p, at 744p. See story...

CADBURY this morning upped growth and profitability targets while promising better shareholder returns to hold off a hostile takeover from Kraft Foods.

The company also confirmed it is in informal talks with other potential bidders, reports the Times.

Of Kraft's £10.1bn offer, Roger Carr, chairman of Cadbury, says: "Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don't let Kraft steal your company with its derisory offer." See story...

US INVESTMENT BANK Citigroup has vowed to "vigorously defend" itself against the £1.5bn lawsuit filed by the private equity owner of EMI, after its troubled £4bn acquisition of the music group, reports the Independent.

British-owned investment vehicle Terra Firm is accusing Citi of lying about another bidder's involvement in the 2007 auction of EMI which then cost the private equity a "fraudulently inflated price" for the entertainment company.

Terra Firma claims Citi also wanted to drive EMI into, or to the brink of, insolvency so that it could engineer a merger with its rival Warner Music. Citi vehemently denied the allegations. See story...

THE RECESSION'S toll on consumers will be laid bare today as Bank of England figures show that nearly a third of workers have had their household income drop by at least £1,200 a year amid soaring unemployment, shorter working hours and pay freezes says The Times.

About 30% of manual workers and 27% of office workers said that their disposable income - money left to spend each month after paying tax, housing costs, utility bills and loan payments - had fallen by £100 or more over the past 12 months, according to the Bank's Quarterly Bulletin. See story...