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Pensions

Volume 124: debated on Friday 18 December 1987

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To ask the Chancellor of the Exchequer if he will publish a table showing the estimated costs at current and at constant prices of private pension income tax reliefs in 1960, 1970, 1980, 1985 and the latest year for which the figures are available, distinguishing between employers', employees' and self-employed contributions, tax-free lump sums and other reliefs, and also showing the costs as a proportion of income tax revenues.

Readily available estimates of the direct revenue costs of pension reliefs are given in the table.latest year for which figures are available the estimated amounts by which income tax liability is reduced on account of private pension income tax reliefs, assuming taxpayers with gross annual earnings in the ranges under £5,000, £5,000 to £10,000, £10,000 to £20,000, £20,000 to £30,000, £30,000 to £50,000, £50,000 to £100,000 and over £100,000.

Estimates for 1987–88 are as follows:

Range of total earned incomeNumber of taxpay-ing units' receiving relief for contributions to occupationalpensions schemes or retirement annuity policiesAverage reduction in income tax liability, on account of individuals ' contributions to occupational pensions schemes and retirement annuity policies
£(thousands)£
0–5,00028060
5,000–10,0002,500100
10,000–20,0004,510180
20.000–30,0001,060370
30,000–50,000345870
50,000–100,000752,300
over 100,000106,400
1 Married couples are treated as one unit.

To ask the Chancellor of the Exchequer what would be the cost to the Exchequer of increasing the single person's allowance to £3,110.

The direct revenue cost at 1988–89 levels of income of increasing the single person's allowance to £3,110 is estimated to be £2·2 billion. The cost assumes the wife's earned income allowance and the single age allowance are increased by the same cash amount and is compared with indexation of the current income tax bands and allowances to 1988–89 levels as in table 4·1 of the 1987 Autumn Statement.