Legal & General believes the self-employed will be able to reap an extra 30 per cent on to their pensions under the new proposals for stakeholder.
Responding to the Government's consultation brief on taxation, the life office points out the self-employed's pension contributions will be paid net.
Under existing rules the self-employed pay gross and claim their tax relief back via their tax returns. L&G's research shows the majority do not re-invest it back into their pension plan.
With stakeholder, providers will claim the tax relief from the Inland Revenue on behalf of the self-employed and automatically invest it in their pension plan.