Pensions (Tax Relief)

Treasury written question – answered on 11th February 2004.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

To ask the Chancellor of the Exchequer

(1) if he will estimate the amount of tax relief on pension contributions provided in each financial year since 1996–97 (a) in total and (b) broken down by (i) higher rate taxpayers, (ii) basic rate taxpayers and (iii) non-taxpayers;

(2) if he will estimate the number of taxpayers receiving pension tax relief at (a) the higher rate and (b) the basic rate in each year since 1996–97; and what percentage of all taxpayers below state pension age these figures represent in each case.

Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury

holding answer 9 February 2004

Estimates of total tax relief on pension contributions from 1998–99 to 2002–03 are contained in table T7.9 of Inland Revenue Statistics. The latest version is on the Inland Revenue website: http://www.inlandrevenue. gov.uk/stats/pensions/03IR079.pdf

Estimates prior to 1998–99 are contained in table 7.7 of 'Inland Revenue Statistics 2000', a copy of which is in the House of Commons Library.

Estimates of relief attributable and numbers of taxpayers receiving tax relief by marginal rate band for all the years specified in the question are not readily available. However, broad estimates of the proportion of relief and number of taxpayers receiving relief split between higher rate and others are given in the following table. The number of taxpayers below state pension age in 2002–03 is estimated at around 24½ million.

Percentage of tax relief on individual and employee pension contributions with the number of taxpayers receiving relief, 2002–03
Marginal income taxrate Percentage of tax relief Number of taxpayers receiving relief
Non-higher rate 45 13 million
Higher rate 55 2½ million

Note:

Estimates are provisional and based on the 2000–01 Survey of Personal Incomes projected to 2002–03.

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