More than £300 billion ($521 billion) has been removed from the UK's pensions savings funds by UK chancellor Gordon Brown's action over dividend tax credits according to a new report from UK-based private client stockbroker Killik & Co. The report states that the UK chancellor's decision to remove dividend tax credit from pensions is "one of the causes of the pensions crisis". Taxing share dividends in pension was thought to remove around £5 billion a year from the UK’s savings pot but it also magnified the collapse of the UK stock market between 2000 and 2003, according to the report. "In taking this action, and reducing equity yields by 20 per cent, they altered the delicate balance between equities and other investments, most significantly the gilt market. In the years immediately after 1998 this was not a problem, as rising global stock markets hid the effect of the removal of the tax credit,” said Paul Killik, senior partner at Killik. "But when markets fell from 2000 to 2003, and investors looked down for the 'safety net' of the yield, they found that it was 20 per cent lower and enormous damage to the savings industry and individual investors ensued." The new research also reveals that pension funds now receive £8 billion a year less because of the removal of dividend tax credit, up from £5 billion. When the market started to slip Killik argues that it fell further than would otherwise have been the case. In March 2003, at the low point of the market, the yield on ten-year gilts was lower than that on the FTSE 100 - the first time this had happened in 50 years. But if tax credits on dividends had not been removed, this inflection point would have been reached at 4,100 not 3,287 according to Killik. "As most of the liquidity issues suffered by the life companies and the pension funds were triggered when the market fell through 4,000, this point would not have been reached had tax credits still been in place," the report states. Once this point was reached, the regulator required funds to bolster their liquid assets by selling equities, which in turn drove the market down further, a vicious cycle that only stopped when equities' yields were higher than gilts. Killik calculates the value of the market between 4,100 and 3,287 equates to about £300 billion.