The Guardian manages a fail on pensions tax relief:
Pensions tax relief will cost the government almost £40bn this year, up more than £2bn on the previous year, illustrating the growing cost of subsidising retirement saving.
According to new statistics from HMRC, tax relief on employee pension saving is set to rise to £21.2bn while the tax giveaway on employer contributions to occupational pension schemes hit more than £18bn.
It’s bollocks, of course it is. Because the income, when it’s a pension, is taxed. Therefore the cost of the delay – not relief – is the tax not collected at the point of saving minus the tax collected at the point of consumption of the resultant income.
And if you’re not doing the calculation that way then you’re lying.
I’m also a little bit worried about that employer break. Dunno if there are special breaks or not. Could they actually be saying that employer pensions contributions shouldn’t be regarded as a cost of being in business? Or is there a greater break than that?
And then, this being arts graduates writing about money, there’s this entire argle bargle:
But the average level of contributions fell, leaving the bulk of tax relief to be claimed by higher-rate taxpayers, who pay 60p from every £1 of pension contribution compared with standard-rate taxpayers who must pay 20p for every £1 of pensions saving.
Whut? What are they even trying to say? That lower rate taxpayers get a £1 pension contribution for every £0.20 they save?