The People’s Pension brands the Autumn Budget a missed opportunity to tackle the net-pay anomaly in workplace pensions
Responding to the Autumn Budget announcement, Gregg McClymont, director of policy at The People’s Pension1, said:
“The government has missed the perfect opportunity to tackle the net-pay anomaly in workplace pensions; a scandal waiting to happen at a time when maintaining public confidence in auto-enrolment is crucial. Currently, more than a million low earners could be missing out on 20 per cent tax relief through no fault of their own. It’s unsustainable for Government to automatically enrol millions of people into pensions and not ensure that the system works fairly on everyone’s behalf.
“Each year ahead of the Budget, we hear speculation about a reform to pensions tax relief. It’s hard to imagine a future Chancellor won’t return to the issue. The current system is very generous to the highest paid and confusing to many. A flat-rate system set at between 25-30 per cent, and re-branded as a top-up, would benefit those most in need of boosting their retirement savings.
“With nearly 10 million people now auto-enrolled into a workplace pension, the government must focus on the tax system adjustments which will make this system work in the long term.”
Notes to Editors
The People’s Pension is a leading and not-for-profit master trust (multi-employer pension scheme) in the UK, with more than 4 million members from more than 80,000 employers, and £5bn Assets Under Management (accurate at 30 October 2018). We tweet as @peoplespension.