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UK pensions update: tax relief reform calls, fiscal drag on pensioners, gilt stewardship for climate, DB endgame trends, bulk annuity outlook, and TPR/FCA VFM framework—29 August 2024

Published on: 29 August 2024

Published by a LexisNexis Pensions expert
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Taxation

Think tank report urges the government to reform pension tax relief to plug the ‘black hole’ in public finances

The Labour administration is being urged to revise £66 billion of pension tax relief to generate additional receipts and raise extra revenue in order to help close the gap in the public finances. In a report released on 26 August 2024, the Fabian Society pressed the new government to revamp pension tax relief, with the potential to raise £10 billion per annum. Titled ‘Expensive and Unequal: The Case For Reforming Pension Tax Relief’, the paper set out ideas including a single flat rate for pension tax relief. The report noted that relief on pension contributions hit £66 billion in 2022/23, a 55% rise since 2016/17. However, £22 billion was recouped through taxes on pensions last year. Andrew Harrop, general secretary of the Fabian Society, said the UK cannot sustain such an expensive and poorly targeted system as it stands at present today. The think tank’s report asserted that 84% of pension tax relief, an estimated...

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