UNISON has responded to the government’s consultation on changes to tax relief arrangements for pensions by calling for a fairer system of tax relief on pension contributions.
A fairer system would provide a real incentive for lower and averagely-paid workers to join good schemes and save for their retirement.
The union believes that the consultation is part of an agenda to replace pensions with ISA-style saving arrangements.
Currently, member and employer contributions and nearly all investment returns are tax free, but once the pension is in payment it is taxed as earned income.
The government is proposing that contributions would be taxed, investment returns would be tax free and income in retirement would be tax free.