View more on these topics

MMTV: Is tax relief working as a saving incentive?

Panelists at Money Marketing’s recent retirement planning summit in Dublin debate whether the current system of tax relief needs to be reformed.


Summit 3


M&G reports £3.4bn of retail sales

M&G says it continues to outsell “all of its competitors” in the UK retail market, and overall external funds under management rose by 8 per cent in the first half to £75.7bn. The Prudential-owned asset manager says its net retail inflows were £3.4bn in the UK and Europe. In the UK its retail assets under […]


We must solve confusing protection criteria

Martin Werth’s recent article, Is Protection Really Dying? raised some interesting points and served to show why, as an industry, we sometimes look past the issues that are really important. One of Martin’s comments related to permanent and total disability: “The future also lies in consumer-driven innovation. Customers must be at the heart of any […]


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. Incompetent Regulators Awards Team 13th August 2010 at 1:10 pm

    1) People must be given a reason to buy and tax incentives is a good one

    2) Advisers must be given a reason to sell/advise e.g. pay commissions and/or fees

    With both of the above you have the perfect formula for success.

  2. Tax Relief, especially for those only qualifying for basic rate relief, has always been a poor incentive for investing into an inflexible arrangement such as a personal pension. Especially when any tax benefit is effectively clawed back from the annuity in payment.

  3. I totally agree with the Incompetent RATs pensions and savings plans need to be sold and are not bought and I am not going to work for Nowt.

  4. Since the recent changes in tax treatment of pensions the only contributions now paid by the wealthy are if they can get tax relief at the highest marginal rates. What is the value of only receiving tax releif at 20% on a pension if laterly the annuity/ pension income is taxed at a higher rate. ISAs will accommodate lower saving rates in this space as while no tax relief is granted on the contribution it is invisible to the HMRC thereafter. The lack of incentives is one of the principle reasons why there is no incentive to save!

  5. As a young adviser I feel that those who should have already started to save for retirement (anyone over the age of 18!) really don’t care whether there is tax relief or not. Half of them probably don’t even know that they get tax relief on contributions let alone how to make them.

    Anyone in their mid 30s and younger have been ‘taught’ from an early age that you get through life borrowing money (thats how we all got a uni education!) not saving it.

    There’s a whole culture that you have to change first to start to save for retirement, tax relief or no tax relief.

  6. 13 years of Crash Gordon’s destructive meddling with the pensions system, not to mention stakeholder, has done so much damage to public confidence that the situation may now be irrecoverable.

    Just think ~ pension funds used to grow free of all taxes, but CG decided to tax them. Annuity rates used to be related to double digit interest rates, but CG refused all calls to unshackle pension funds from now record low annuity rates. You used to be able to insure your pension contributions against long term loss of earnings capacity due to sickness or acident but Jeff Rooker scrapped that, as he did the facility to secure life insurance through a pension plan.

    Then we had earnings limits, the LTA and, to crown it all, Pensions Simplification. Now, the new government’s talking about axing higher rate tax relief.

    Is it any wonder that with all the news about pensions being so resoundingly negative, people are put off them? And many of those who might still be inclined do do something in the way of retirement saving are so over-burdened with huge mortgages and credit card debt as a result of no regulation that they can’t afford to anyway.

    And to think that the person now in charge of finding a way forward is Mark Hoban. It doesn’t bode well, does it?

  7. The basic rate tax payer with no employer contribution gets a tax free lump sum as a trade off for being locked into a fund.

    The average basic rate tax payer pension annuitant can not live long enough to justify this trade off.

    For most people, therefore, the current tax incentives are insufficient.

    Unless the government are willing to increase tax incentives they should consider removing the current tax incentives and simply make pension contributions compulsory for all. One way or the other will work – the present system clearly does not.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm