HC Deb 22 March 2001 vol 365 cc358-9W
Mr. Field

To ask the Chancellor of the Exchequer (1) what the total annual cost to the Treasury was of providing tax relief on personal pension plans at(a) the starting rate, (b) the standard rate and (c) the higher rate in each of the last three years; [151767]

(2) how many people paid into personal pension plans and how many schemes attracted tax relief at (a) the starting rate, (b) the standard rate and (c) the higher rate in each of the last three years. [151766]

Miss Melanie Johnson

[holding answers 1 March 2001]Estimates of the cost of tax relief for contributions to personal pensions and such information as is available on the number of contributors by rate of income tax are given in the tables.

Number of employees1 making contributions to personal pensions
Approximately 3 million2
Of which:
higher rate taxpayers 200 thousand
1Based on aggregate information provided by plan managers and survey data
2All benefit from repayment of basic rate tax claimed by their pension provider including those who are non-taxpayers or pay tax at less than the basic rate

Number of self-employed1 making contributions to personal pensions
Thousand
Rate of income tax 1998–99 1999–2000 2000–01
Non-taxpayers 150 160 110
Starting2 rate 180 30 60
Basic rate 680 800 800
Higher rate 250 250 260
Total 1,260 1,240 1,230
1Based on relief claimed on tax returns. 1999–2000 and 2000–01 figures are provisional
220 per cent. lower rate 1998–99; 10 per cent. starting rate 1999–2000 and 2000–01

Cost of tax relief, for personal pension schemes
£ million
Source of contributions and rate of income tax relief 1998–99 1999–2000 2000–01
Employees' contributions
Basic rate 550 580 590
Higher rate 270 290 310
Employers' contributions1
Basic rate 300 300 300
Higher rate 140 150 160
National Insurance rebates2
Basic rate 175 271 287
Contributions by the self-employed
Starting rate3 30 5 5
Basic rate 210 240 240
Higher rate 490 520 550
1On the basis that under present arrangements employers' contributions are not taxable as a benefit in kind of the employees. Figures assume that the proportion related to higher rate taxpayers is the same as that observed for employees' contributions.
2Basic rate tax relief in respect of the employees' part of the National Insurance rebate received by around 3.7 million employees with appropriate personal pensions.
320 per cent. lower rate 1998–99; 10 per cent. starting rate 1999–2000 and 2000–01.