Adrian Boulding: Untangling the net pay anomaly

When it comes to terminology, the pensions industry is often its own worst enemy. Nowhere is this more true than when it comes to explaining the difference between ‘net pay' and ‘relief at source' schemes. Contrary to all common sense, relief at source schemes require net contributions while net pay schemes provide immediate tax relief. No wonder, then, that everyone is confused … On the face of it, the net pay method - traditionally used by occupational pension schemes - looks more logical. The tax relief is automatic and it arrives - and can be invested immediately - without the six...