Tax on pensions in payment contributes billions to the Exchequer and should not be ignored in the rush to change pension tax relief rules, a provider has said.
The government is examining whether to move away from the current system, known as EET, where contributions are tax-exempt, investment returns are tax-exempt but pensions in payment are subject to tax. It is considering a shift to ISA-style pensions, or TEE (where returns are taxed but growth and pensions in payment are not) or a flat-rate tax relief system. The Chancellor indicated last month the government is leaning towards a flat-rate of between 25% and 33%. Suffolk Life head of marketing and product Greg Kingston said tax collected on pensions in payment contributes more than £13...
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