By IPE Staff2021-02-25T12:02:00+00:00
The Pensions & Lifetime Savings Association (PLSA) has warned that major reforms to the UK’s pension taxation system can see employers and pension funds take on substantial costs.
Over the last year, there has been speculation that the government plans to reduce the level of fiscal support for pension saving with changes ranging from removing higher rate income tax relief, reducing the annual or lifetime allowance, introducing a flat rate of tax relief for all savers of 25% or 30%, or overhauling the system so that all pension contributions are taxed at a person’s full marginal income tax rate upfront – known as TEE.
PLSA warns most pension tax reform options would leave many with lower savings
By Duncan Ferris
24/2/21
The Pensions & Lifetime Savings Association (PLSA) has said that none of the four main options for pension tax reform that are commonly discussed meet its Five Principles for Pension Taxation .
Its report outlined five principles on which the PLSA believes any reform should be based, including the need for reforms to help savers make the right decisions about retirement saving, and to be simple for employers and schemes to adopt and administer.
Other listed principles were the need to help everyone, regardless of their type of employment, to save for retirement, and to promote adequate incentives and financial support for retirement saving.