Pension tax relief provides a crucial support for savers by boosting their savings over the long term. However, there has been speculation that Government plans to reduce the level of support on offer. People aren’t currently saving enough to have an adequate income in retirement, so it’s essential that any changes in pension tax relief make the situation better, not worse.
The PLSA identified the principles against which any reform should be assessed and considered whether they satisfy the range of reforms most frequently discussed. We concluded that rather than embark on a major reform of pension tax relief, there is more value in addressing some of the more specific and technical shortcomings of the current system. We also proposed that should the Government undertake a reform of pension tax relief that it should be based on our five principles.