Economic trends: pensions and employer NICs

22 Jul 2015

Reforms will only flatter the public purse temporarily – a phased-in national insurance for pensions could make more sense and is one of the topics up for debate in the Treasury consultation on pensions tax relief, suggests Carl Emmerson, deputy director of the Institute for Fiscal Studies

The Summer Budget launched a consultation on possible radical reform to the way in which pensions are taxed. Reform is needed and the proposals being consulted on could eliminate some of the poorly designed subsidies in the current system.

But the proposed changes could also throw away some of the attractive features arising from how the UK tax system currently treats pension saving. Directly tackling the subsidies in the current system, while leaving its underlying structure untouched, would be a better way forward.

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