The Chartered Institute of Payroll Professionals
News On Line
“The savings tool appeals to many employees, particularly those less financially secure, and there’s early anecdotal evidence of a positive impact on financial wellbeing, resilience and confidence among those who have signed up to save.
But employee take up in our trial, and in similar models, is low. Finding ways to support people to overcome the behavioural barriers to getting started with short- term saving is a critical area for financial resilience research.”
Back to contents
Analysis by the PLSA suggests that amendments to pension tax relief would benefit few 2 August 2021 The Pensions and Lifetime Savings Association (PLSA) has carried out research which suggests that changes to pensions tax relief would not significantly improve the retirement income of lower and median earners and would lower the pension income for many others who pay higher rate income tax. There have been suggestions that the higher rate of pensions rax relief will be removed, to make way for a new single rate of relief at 25%. The media has speculated that this will generate more revenue to help pay for the enormous cost of the pandemic or to fund changes to the social care system. The PLSA investigates how workers with varying incomes, in different types of workplace pension scheme, could potentially be impacted by four reform options, in the Pension Tax Reform: Implications for Savers report. The document explores impacts on private pension income, total retirement income, retirement replacement rates, and the PLSA’s Ret irement Living Standards.
The options for reform are as follows:
Flat rate relief set at 20% Flat rate relief set at 25% Flat rate relief set at 30%
• • •
• TEE – this is where pension contributions are taxed at a person’s marginal rate of income tax, but inves tment returns and pension income are exempt
The report suggests that the abolition of the higher rate of pensions tax relief would not benefit most taxpayers who pay basic rate income tax. The implementation of a higher single rate of 25% would, in fact, only lead to a slight increase in pension income for a small number of savers.
The report discusses the impacts of different tax reforms on the pay of median earners and that of also on that of higher rate taxpayers. Read it in full here.
Back to contents
HMRC Pension Schemes Newsletter 131
HMRC Pension Schemes Newsletter 131
HMRC has published the latest pension schemes newsletter – number 131, for July 2021, in order to update stakeholders on the latest news for pension schemes.
This instalment contains articles on:
Relief at source
•
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
Page 173 of 220
Made with FlippingBook - Online magazine maker