Latest Article: The cost of tax relief is more than you think
Posted by: Imber on Jul 1, 2015
The cost of private pensions is now £48 billion. An outstanding figure which that is made up of £34 billion in tax relief and £14 billion of national insurance subsidy. This represents a 14% of all income tax, corporation & national insurance tax to be collected on the 2015-2016 period. This also represents an approximate 50% of state pensions’ total costs. However, early this week, the Centre for Policy Studies (CPS) suggested that pensioner households that received more in income from the state than they paid in tax were an excuse that justified welfare reforms.
Similarly, George Osborne suggested in the pre-election Budget that, “high earners are benefiting from a disproportionate amount of tax relief” to “we’re spending too much money on tax relief as he announced a further reduction in the maximum amount you can have in a pension to £1m from April 2016 (down from £1.8m just four years ago).
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