PARLIAMENTARY WRITTEN QUESTION
Pensions: Tax Allowances (23 October 2014)
Question Asked
Asked by:
Stephen Doughty (Labour)
Answer
The proportion of the cost of income tax relief on pension contributions for the given income ranges, and years, is provided in the table below.
% of the cost of income tax relief on contributions | ||||||
Income bands | 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 |
Up to £19,999 | 8% | 6% | 5% | 6% | 5% | 5% |
Between £20,000 and £44,999 | 31% | 32% | 35% | 37% | 37% | 36% |
Between £45,000 and £74,999 | 25% | 26% | 28% | 32% | 33% | 34% |
Between £75,000 and £99,999 | 7% | 8% | 8% | 10% | 10% | 10% |
Between £100,000 and £149,999 | 8% | 9% | 9% | 7% | 8% | 8% |
£150,000 or more | 20% | 18% | 14% | 8% | 7% | 7% |
All | 100% | 100% | 100% | 100% | 100% | 100% |
Estimates are based on Surveys of Personal Incomes with projections for 2012-13 onwards. Historical estimates have been updated to take into account the latest outturn data and updated projections. Projected years are subject to uncertainty.
The effect of the reductions in the Annual Allowance in 2011‑12 and Lifetime Allowance from 2012-13, as well as further reductions in both allowances in 2014-15 are reflected in the table. These restrictions mostly affect individuals with incomes over £150,000 hence the drop in share of tax relief for these individuals in latter years.
Increases in the Personal Allowance (from £6,475 in 2009-10 to £10,000 in 2014-15) cause a decline in the share of income tax relief going to those in the “Up to £19,999” income band. The higher personal allowance reduces the amount of income subject to tax for these individuals, hence also reduces their share of tax relief.
Answered by:
Mr David Gauke (Independent)
10 December 2014
Contains Parliamentary information licensed under the Open Parliament Licence v3.0.