Pensions - Articles - Treating tax relief as a piggy bank is not good policy

 In addition, the cost of not levying employer NI contributions on employer pension contributions rose by £550m to £16.9 billion, giving a grand total of around £41 billion:

 Dec_17_Main_Reliefs_Final.pdf

 However, these figures exclude a number of other tax breaks on pension saving including on contributions to personal pensions and the non-taxation of investment growth within pension funds, which adds another £14 billion or so to the bill:

 PEN6__2001-02_to_2015-16___for_publication.pdf 

 As a result, the total cost of pension tax relief is now approximately £55 billion.

 Commenting on the figures, Steve Webb, Director of Policy at Royal London said: ‘The Treasury will no doubt be studying the rising cost of pension tax relief with great interest. The worry is that they will be tempted to use pension tax breaks as a ‘cash cow’, useful for dipping into whenever they are short of money. Pension tax reliefs have been ‘salami sliced’ six times since 2010, with cuts to both lifetime and annual allowances. Every time this happens it adds complexity and reduces long-term trust in the system. It is time the government either pledged to refrain from tinkering with tax relief or set out a strategic long-term vision for how this public money could be better used. Treating tax relief as a piggy bank is not good policy’.