Cost of pensions tax relief projected to be £41.3 billion in 2019-20
01 October 2021
Statistics from HMRC have revealed that gross pensions tax relief is projected to be £41.3 billion for 2019-20.
This is an increase from the figure of £38.2 billion in 2018-19, and the amount has increased by £4.4 billion since 2017-18.
Basic rate taxpayers get 20% tax relief, higher-rate taxpayers get 40%, whilst additional-rate taxpayers receive 45% tax relief.
Commentary indicates the increase will have been driven by the increase to mandatory contributions under Automatic Enrolment (AE), which went up from 2% in 2017-18 to 8% in 2019-20.
With figures of this level, will the Government look to review the way pensions tax relief is given? The CIPP’s policy team will be watching and reporting on the Budget, on 27 October 2021 to keep payroll professionals up to date.
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