Universal Pension Tax Relief ‘Devoid of Any Economic Rationale’
15 July 2024
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IEA research quoted in Interactive Investor
Research by former IEA Academic and Research Director Philip Booth has been quoted in an Interactive Investor article analysing possible pension reforms under the new government.
The article said:
“The idea of a flat rate of pensions upfront tax relief has been floated for the best part of a decade.
“Those in favour suggest the current system – where savers get relief at their marginal rate of tax on pension contributions, which can be up to 45% – should be scrapped and replaced with a universal rate of somewhere between 30% to 33%.
“Those against universal pension tax relief include Professor Philip Booth, academic and research director at the Institute of Economic Affairs, who in 2016 said: ‘Introducing a flat rate of pensions ‘tax relief’ would be devoid of any economic rationale and prohibitively complex in practice. It would also necessitate further complex legislation to prevent anomalies arising’.”
Read the full article here.
You can also read Philip’s 2016 IEA briefing on pensions tax reform here.
The article said:
“The idea of a flat rate of pensions upfront tax relief has been floated for the best part of a decade.
“Those in favour suggest the current system – where savers get relief at their marginal rate of tax on pension contributions, which can be up to 45% – should be scrapped and replaced with a universal rate of somewhere between 30% to 33%.
“Those against universal pension tax relief include Professor Philip Booth, academic and research director at the Institute of Economic Affairs, who in 2016 said: ‘Introducing a flat rate of pensions ‘tax relief’ would be devoid of any economic rationale and prohibitively complex in practice. It would also necessitate further complex legislation to prevent anomalies arising’.”
Read the full article here.
You can also read Philip’s 2016 IEA briefing on pensions tax reform here.
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