Pension tax reforms: Implications for savers

During the past year, there has been much speculation in the media that the Government may be looking at reforming pensions tax relief as a source of additional revenue to help to pay for the costs of the pandemic or to support the cost of changes to social care. 

In response to this speculation, the PLSA has produced two reports. The first, ‘Five Principles for Pension Taxation’ assessed a number of potential reforms against its five principles. 

In the second, we explore in more detail how different workers with different levels of income and in different schemes would be affected by four of the reforms: a change from EET taxation of pensions to TEE and a change to a single rate of tax relief set at 20%, 25% or 30%. 

The modelling was produced by PPI and subsequently analysed by Jackie Wells for the PLSA.