IFS reveals blueprint for proposed pension tax system reforms

IFS says current system gives advantages to high earners

Martin Richmond
clock • 3 min read

The pensions tax system is in need of reform due to the advantages it gives for savers on higher retirement incomes, according to the Institute for Fiscal Studies (IFS).

The IFS report A blueprint for a better tax treatment of pensions - published today (6 February) - found the pensions tax system is geared more toward savers who receive substantial contributions from their employers, while providing sparse support to savers with lower retirement incomes.  The institute's proposals include reforming the 25% tax-free component to provide a more equal subsidy to all private pensions, which it says would benefit savers on a lower retirement income. In addition, the IFS proposed giving savers upfront National Insurance contributions (NICs) relief on all cont...

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