Pension Tax
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Pension tax

Pension tax relief provides crucial support for people by boosting their savings over the long term. But reducing the tax relief on pension contributions can be tempting for any Government seeking to reinforce its finances.

The problem is that currently people aren’t saving enough to have an adequate income in retirement. So, it’s essential any changes in pension tax relief make the situation better for savers, not worse.

THE CHANGE WE WANT TO SEE

We argue there is more value in addressing some of the specific and technical shortcomings of the current system, rather than embarking on major reform. It’s vital that any change to pension tax relief is based on the PLSA’s five principles.

RELATED DOCUMENTS

2023 Budget Submission
03 February 2023
In our 2023 budget submission we recognise that cost of living concerns are, rightly, at the forefront of the nation’s mind, and look to balance this while ensuring that people can expect an adequate standard of living when they come to retire.
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Five principles for pension taxation
24 February 2021
The PLSA has set out five principles against which any reform should be assessed.
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Pension tax reforms: Implications for savers
20 July 2021
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. The PLSA has produced two reports to assess the implications for savers.
READ MORE
Pensions Tax Relief Administration: Call For Evidence: PLSA Response
13 October 2020
The Net Pay/RAS anomaly is an ongoing tax administration issue that results in approximately 1.5 million lower earners in Net Pay schemes missing out on pensions tax relief. It also affects many high earners in RAS schemes, as many do not claim the additional tax relief (beyond the Basic Rate relief automatically provided to them through RAS) due to them.
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PLSA response to the Treasury Select Committee call for evidence: Tax after coronavirus
09 September 2020
In July 2020, the Treasury Select Committee launched a Call For Evidence on Tax Reform after Coronavirus. The Association is very pleased to respond to the Call for Evidence, highlighting the importance of pensions tax relief in supporting adequate incomes in retirement and the need for reform on the net pay / Relief at Source anomaly, whereby some low earners do not receive tax relief on their pension contributions.
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