Over two thirds (71%) strongly agreed or tended to agree that pension providers should charge savers in the same way, while nine in ten (90%) strongly agreed or tended to agree that pension providers should explain their charges using examples based on pounds and pence.
Almost nine in ten (87%) strongly agreed or tended to agree that pension providers should provide a cost comparison table so that savers could compare charges between providers.
Pension schemes newsletter 72 - September 2015 28 September 2015
Pension schemes newsletter 73 includes information on:
Relief at source - annual returns of individual information for 2014 to 2015 Relief at source - Scottish Rate of Income Tax Reminders for pension scheme returns, penalty reminders and payment reminders 2014 to 2015 annual allowance messages Lifetime allowance reduction and transitional protection Removal of form APSS161 Finalised regulations Qualifying Recognised Overseas Pension Schemes Pension flexibility
CIPP response to the consultation on Pensions Tax Relief 29 September 2015
The CIPP has submitted its formal response to HM Treasury following the consultation on pensions tax relief.
The response was based on the replies to an electronic survey which was issued to CIPP members.
Summary of key findings
55% of respondents feel that the current system of tax relief is complicated; 64% of respondents believe that the complexity of the system undermines an individual’s incentive to save for their retirement; 45% of respondents believe that a simpler system will result in greater engagement with pension savings; Despite many suggestions for simplification, there is no common agreement on an alternative option; Only 21% believe that a different system would allow greater personal responsibility for adequate pension saving, with 62% unsure; and An even greater number of respondents (71%) were unsure whether an alternative system would allow individuals to plan how they would use their savings in retirement. Conclusion Although there is broad agreement that the current system of tax relief on pensions is complex and not widely understood, it is clear that there are a wide range of opinions on how this could be simplified. Without an alternative proposal to consider there is no common agreement as to whether changing the taxation regime will encourage more individuals to save for their retirement, with much of that uncertainty depending on what that alternative proposal would be. There is however a common theme running which is that, regardless of the chosen taxation method for pensions, having a simple system communicated clearly will have the biggest impact on pension saving. Recommendations With the knowledge that complexity and lack of understanding have a major impact on pension savings, this should be at the forefront of government minds when considering how to address this issue. Whilst bearing in mind that the current system may prove to be the most preferable, the CIPP recommends that government uses the suggestions for reform generated by this consultation and publishes a further consultation based on the most practical and straight forward proposals. The consultation should include a series of scenarios setting out the impact each proposal would have on varying groups of individuals, such as basic rate taxpayers, higher rate taxpayers etc. with a clear outline of how it is envisaged each option, including the current system,
CIPP Policy News Journal
25/04/2016, Page 371 of 453
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