Net pay pensions petition
28 June 2019
NOW: Pensions has launched a Parliamentary petition to urge government to take action to ensure all savers receive tax relief regardless of the type of pension scheme they are in.
New analysis by NOW: Pensions reveals that across the country, low earners could be missing out on up to £111 million of government tax relief through no fault of their own. This is an increase of 43% on the previous tax year when NOW: Pensions calculated that savers were missing out on £78 million.
The issue arises primarily for workers who are automatically enrolled into a pension because they earn more than £10,000 per year but who are earning under the income tax threshold – now £12,500 per year. It is estimated that around three quarters of these workers are women in low-paid or part-time jobs.
Whether or not these workers benefit from pension tax relief depends on what sort of pension arrangement their employer has chosen – either ‘Net Pay’ or ‘Relief at Source’ (RAS).
The CIPP has been part of the working group campaigning to address the unfairness of net pay arrangement tax relief for low earners, which is now calling directly on the Government to act to end this discrepancy.
Adrian Boulding, director of policy at NOW: Pensions launched the parliamentary petition:
“Reform the payment of pension tax relief to ensure that no low earners miss out
We call on Government to ensure no low earners miss out on the tax top up on their pension contributions. We estimate that this issue hurts the living standards of nearly 2 million pension savers. Government should act to ensure low earners in all types of pension schemes receive pension tax relief.”
Sign the petition to help ensure low earners get their pension top up from government.
- If the petition receives at least 10,000 signatures, then it requires a formal response from Government.
- If the petition receives at least 100,000 signatures, then it will be considered for debate in Parliament.
NOW: Pensions has created a dedicated webpage with further information about the net pay anomaly and the associated petition.