would work. This would enable stakeholders to make more informed assessments of how best to incentivise individuals to save for retirement.
The full response is available to view and download through the news link below.
CIPP response to the consultation on Pensions Tax Relief
New drive to explain State Pension reform 24 September 2015
A major new campaign has been launched aimed at preparing today’s workers for the introduction of the new State Pension in April 2016.
Pensions Minister Baroness Altmann has unveiled the new communications drive ahead of the introduction of the new State Pension in April 2016.
Under the tagline “Our state pension is changing”, the campaign aims to broaden the public’s understanding of how the new State Pension will work and crucially, how people can find out how it affects them, based on their own National Insurance record. Like the system it replaces, the new State Pension will be contributory in nature with the weekly payment people receive dependent on the number and type of National Insurance contributions they have made.
Minister for Pensions, Baroness Altmann, said:
“Huge efforts have been put into reforming the mind-blowingly complicated State Pension system that exists today into something that, over time, will be clearer and fairer for everybody. But the job of explaining to people how the reforms will affect them hasn’t been done well enough. People need to understand, so they can make the right decisions about saving and preparing for later life. One of my first actions on becoming Pensions Minister was to identify this priority, and I’m very pleased to now be launching this major campaign.” In particular, the new advertisements target people within 10 years of reaching State Pension age, a group which also has access to new freedoms to spend private pension savings flexibly. Many of these people may want to base decisions about whether or not to draw down their private pension savings on their likely State Pension amount. Anyone aged 55 or over can apply for a personalised state pension statement that will give them an estimate of what they will get under the new system. This will be based on their work history and National Insurance contributions to date. The statements have recently been updated to include information on the contracted out deduction that may have been made. The statements also give additional information about how people may be able to improve their State Pension before they reach State Pension age.
Further information
The new State Pension
State Pension simplification
8 things you need to know about pensions
Pension taxation myth buster from NAPF 28 September 2015
HM Treasury’s consultation ‘Strengthening the incentive to save: a consultation on pensions tax relief’ closes on 30 September. To help inform the debate on the topic of pension taxation, the National Association of Pension Funds (NAPF) has issued a pension taxation myth buster . Pension tax relief is money lost to the Exchequer forever. Wrong! Pension tax relief could more accurately be described as pension tax deferred. In the current system savers don’t pay tax on their money when and while they save for a pension, but most do then pay tax on 75% of their pot as they come to spend it (at their marginal rate).
Changing the system will give the Exchequer more money. Wrong! It’s impossible for anyone to compare models with certainty.
Modelling a central scenario – which assumes different proportions of contributions from different types of taxpayer both before and after retirement – the tax take for TEE (taxed, exempt, exempt) would be 15% less than
CIPP Policy News Journal
25/04/2016, Page 372 of 453
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