The current system of pension tax relief is an area which all the main parties wish to change.
The Conservatives intend to reduce the relief on pension contributions made by those earning over £150,000. The savings made would fund an increase in inheritance tax allowance to £1 million for those married or in a civil partnership.
Labour also has plans to reduce tax relief for higher earners. This would be used to fund the reduction in university tuition fees from £9,000 to £6,000. Similarly, the SNP proposes a review of the “tax relief available to the wealthiest”.
The Liberal Democrats are considering a single rate of tax relief, which would be “set more generously than the current 20% basic relief”.
In a much wider measure, the Green Party proposes to abolish tax relief for pension contributions and National Insurance contributions (NICs). This in part would fund a new “Citizen’s Pension” to replace the current state pension (see below).