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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

HMRC repays £48.5m in overpaid pensions tax in third quarter of 2025

HMRC repays £48.5m in overpaid pensions tax in third quarter of 2025

Analysis finds savers have recouped more than £1.5bn since 2015 introduction of pension freedoms

Martin Richmond
clock 03 November 2025 • 4 min read
Govt ignores pension tax lock call as petition responses top 18,500

Govt ignores pension tax lock call as petition responses top 18,500

AJ Bell started petition; Govt forced to respond after 10,000 signatures

Jenna Brown
clock 23 October 2025 • 2 min read
How SIPPs and SSASs could help power the UK's energy goals

How SIPPs and SSASs could help power the UK's energy goals

'The role of pensions in supporting renewable energy deserves further consideration'

Caitlin Southall
clock 23 October 2025 • 4 min read