with KEITH FORT

ONE of the latest kites to hit the skies over Westminster this week is one containing yet another threat against our pensions.

It may have escaped many, but Gordon Brown's latest proposal is to tax the lump sum any worker with an occupational pension may choose to take on retirement by giving up part of his or her pension. Currently that lump sum, already restricted by the Inland Revenue, is tax free.

If you think you are years from retirement or this doesn't affect you, don't switch off just yet. Many retirees use that money to build themselves a nest egg when they give up work. In my view it's a wise thing to do if the pension that's left is sufficient to provide you with a reasonable monthly income. There are two good reasons for this. The first is that it not only provides you with reassuring back-up funds in an emergency, but you can steadily invest it in tax-free schemes and provide yourself with a maximised additional income.

The second is that you are unlikely to avoid paying tax on it if you draw it as a pension . . . and possibly much higher tax than you think. This is why the latest threat to tax lump sums is so diabolical. If it persuades people to leave the cash with their pension to avoid a lump sum tax payment they could be in for a shock. Most people don't realise that once they stop being workers and reach retirement age they are hit by an entirely different tax system. I didn't and, believe me, it hurts.

The present system is geared to helping the poorest pensioners -- those who have not provided for any additional pension of their own -- and none can argue with that.

We hear a lot these days about people not paying enough for additional private income when they retire but, believe me, those who do get caned. They become what I call middle income pensioners and they suffer a double tax hurdle. You don't have to be very well-off to get hit.

Every year Gordon Brown sets a means test figure which he will allow pensioners to receive -- currently £17,900. A state pension, plus a SERPS pension, plus a private pension can soon exceed this figure.

In comes the first tax blow -- your tax allowances (increased for 65-year-olds) are reduced by £1 for every £2 your income exceeds this figure. This rule alone puts many pensioners in a minus tax code. Without going into complicated detail this results in every single pound of the private or company pension for which you saved so hard being taxed. Some pensioners do not even benefit from the 10p tax band.

I feel that the current tax system affecting middle income pensioners is unfair, so strongly in fact, that I have complained personally to Gordon Brown's office about this -- to be fended off with the usual reassurances that we pay no more tax than if we pensioners were taxed like ordinary workers. I would not mind if we were, but to give age allowances with one hand and take them away with the other seems ludicrous to me.