Pensions saving will cost Treasury £4bn
The Treasury faces £4bn of lost tax because of pensions saving
The Treasury is facing a £4bn cut in its tax takings if workers are compelled to put money away for their retirement.
According to Aon Consulting, which revealed the tax cost in a study, this would raise questions around the concept of compulsory pension schemes, which have been hailed as the solution to the UK’s pensions crisis.
‘Proponents of compulsion need to outline how they’ll fill the hole in government finances,’ Donald Duval, the consultancy’s chief actuary, told The Times.
Aon reached its conclusions using figures released by the Pensions Commission and calculating the cost of tax relief on compulsory contributions of 9%.