HC Deb 04 February 1998 vol 305 cc709-10W
Mr. Cousins

To ask the Chancellor of the Exchequer if he will estimate the total annual tax revenue generated in each of the years from 1995–96 to 1999–2000 from(a) removing the relief on contributions to non-state pensions and (b) removing the relief on all contributions to non-state pensions on earnings above the upper earnings limit for national insurance. [24749]

Dawn Primarolo

[holding answer 26 January 1998]: Estimates of the full year costs of the relief for employees" and self employed contributions to occupational and personal pensions and employers" contributions to occupational and personal pensions are given in the first table. The second table shows the yield from restricting employee contributions to occupational pensions to the National Insurance upper earnings limit. It is not possible to provide reliable estimate's from restricting reliefs to the upper earnings limit for personal pensions or employers" contributions.

The estimates do not take account of any behavioural effects which might result from such changes and which are likely to be substantial. Estimates for 1999–2000 would depend on levels of income, tax reliefs and allowances.

Cost of tax relief
(£ billion)
1995–96 1996–97 1997–98 1998–99
Contributions to:1
Occupational pensions 2.6 2.6 2.7 2.9
Personal pensions2 2.1 2.1 2.2 2.3
Employers" Contributions3 3.9 4.6 4.9 5.5
1 Based on the 1995–96 Survey of Personal Incomes and other survey data and administrative data.
2 Includes retirement annuity contracts and free standing additional voluntary contracts.
3 Based on a projection of figures compiled by the Office for National Statistics from a variety of sources.
Restrict relief to the UEL
(£ million)
1995–96 1996–97 1997–98 1998–99
Relief for employees' contributions to occupational pensions 340 360 380 400

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