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Tax relief and partnership pensions

Author

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  • Phil Agulnik
  • Julian Le Grand

Abstract

Government support of private (occupational and personal) pensions through tax relief is an important element in the UK’s retirement income system. However, the current tax relief system is regressive, lacks transparency and is difficult to control. This paper argues that it should be replaced by a cost-neutral matching-grant or tax-credit scheme. Such a scheme would embody the ‘partnership’ idea implicit in much government policy in this area, but would be much more progressive, more open and more accountable than existing arrangements. The argument is illustrated through a comparison of the cost and distributional impact of the current system with those of an alternative tax-credit scheme.

Suggested Citation

  • Phil Agulnik & Julian Le Grand, 1998. "Tax relief and partnership pensions," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 403-428, November.
    • Handle: RePEc:ifs:fistud:v:19:y:1998:i:4:p:403-428
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    File URL: http://www.ifs.org.uk/fs/articles/agulnik_nov98.pdf
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    References listed on IDEAS

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    1. Lans Bovenberg & Carel Petersen, 1992. "Public debt and pension policy," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 1-14, August.
    2. David M. Knox, 1990. "The taxation support of occupational pensions: a long-term view," Fiscal Studies, Institute for Fiscal Studies, vol. 11(4), pages 29-43, November.
    3. Giuseppe Ruggieri & Maxime Fougère, 1997. "The effect of tax-based savings incentives on government revenue," Fiscal Studies, Institute for Fiscal Studies, vol. 18(2), pages 143-159, May.
    4. Mervyn A. King, 1980. "Savings and Taxation," NBER Working Papers 0428, National Bureau of Economic Research, Inc.
    5. Bovenberg, A.L. & Petersen, C., 1992. "Public debt and pension policy," Other publications TiSEM a1c7c616-a820-457e-937b-8, Tilburg University, School of Economics and Management.
    6. Dilnot, Andrew & Disney, Richard & Johnson, Paul & Whitehouse, Edward, 1994. "Pensions policy in the UK: An economic analysis," MPRA Paper 10478, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. Callan, Tim & Nolan, Brian & Walsh, John R., 2007. "Pension Priorities: Getting the Balance Right?," Papers BP2008/2, Economic and Social Research Institute (ESRI).
    2. Gerard Hughes, 2001. "The Cost and Distribution of Tax Expenditure on Occupational Pensions in Ireland," Papers WP139, Economic and Social Research Institute (ESRI).
    3. Ginn, Jay & Fachinger, Uwe & Schmähl, Winfried, 2007. "Reformen der Alterssicherung und der sozioökonomische Status Älterer in Großbritannien und Deutschland," Working papers of the ZeS 04/2007, University of Bremen, Centre for Social Policy Research (ZeS).
    4. Gerard Hughes, 2002. "Private Pensions and Equity in Ireland and the U.K," Papers WP142, Economic and Social Research Institute (ESRI).
    5. Shane Whelan & Maeve Hally, 2018. "An Analysis of Taxation Supports for Private Pension Provision in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 49(3), pages 319-359.
    6. repec:esr:chaptr:jacb200756 is not listed on IDEAS
    7. Micheál L. Collins & Gerard Hughes, 2017. "Supporting Pension Contributions Through the Tax System: Outcomes, Costs and Examining Reform," The Economic and Social Review, Economic and Social Studies, vol. 48(4), pages 489-514.
    8. Sergio Cesaratto, 2008. "The Macroeconomics of the Pension Fund Reform and the case of the TFR reform in Italy," Department of Economics University of Siena 549, Department of Economics, University of Siena.
    9. Alan Walker & Liam Foster, 2006. "Caught between virtue and ideological necessity. A century of pension policies in the UK," Review of Political Economy, Taylor & Francis Journals, vol. 18(3), pages 427-448.
    10. Mejra Festić & Jože Mencinger, 2009. "The Perspective of Pension System Reforms in the New Member States," Prague Economic Papers, Prague University of Economics and Business, vol. 2009(4), pages 291-308.
    11. Sergio Cesaratto, 2011. "The macroeconomics of pension reform: The case of severance pay reform in Italy," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 8(1), pages 69-89.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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