27th October 2015
Employees and employers could prove resistant to government plans to cut back on upfront tax relief on pensions.
The Jelf 2015/2016 employee benefits survey asked respondents to answer questions from the point of view of both employees and employers. It shows that the largest percentage of employees at 32.7% want to see no change.
Some 30% say they would be in favour of levelling pension tax relief with Isas at 30.7%, while 24.8% want to see one level of relief rather than the current system which is dependent on the level of tax paid.
Just 8.5% would like to see higher rates of relief removed from higher rate taxpayers when asked about it directly.
Jelf also surveyed employers with 27% saying they wanted no change to the current structure and 29% supporting one level of relief for all.
While the figures demonstrate that both workers and their employers may accept some level of change, opposition could grow as the implications of the change become clearer.
The vast majority of employers surveyed or 88% said that they would need at least a year to implement a change to tax reliefs with nearly 40% saying they would want two years and just over 12% three years to implement the change.
Jelf head of benefit strategy Steve Herbert said: “The maintenance of the current tax relief structure was the most popular response, with a third of the audience favouring this option. The attractions of the current tax relief system are perhaps more appreciated than the government may otherwise feel.
“The levelling of pension and Isa tax relief suggested by the Chancellor was attractive to 31% of the audience. This does support the Chancellor’s suggestion that levelling the tax-reliefs of the two products might encourage more savings.”
Some 155 people took part in the survey.