Spud and pensions.
The government has just published new data on the cost of UK tax reliefs, which is the money given away by the government because some things are not taxable or because costs can be offset against income. Tax reliefs on savings are going to cost £59 billion this year.
The first thing to note is who gets these tax reliefs. The best data on this comes from the Office for National Statistics and shows the distribution of wealth in the UK, including how much of it is made up by having pension savings.
Ah, well, except:
Income tax relief on contributions to defined benefit pension schemes accounted for 53 per cent of income tax relief and contributions to defined contribution schemes accounted for the remaining 47 per cent of relief in 2020 to 2021.
Where there’s an actual fund for a defined benefit scheme then that is included in the wealth figures. Where there’s not a fund – say, docotors (I think, not, I think), where this months contributions pay next month’s pensions – then it’s not included as wealth.
Where are unfunded direct benefit pensions concentrated? The public sector, of course.
Spud’s including the tax costs of those public pensions subsidies but not the wealth that stems from them. Tsk.