I do smile at this, the Governments have allowed your contributions to the pension pot to be free of income tax, your employees contributions were allowable expense against Corporation tax, a massive hit to the Exchequer. As long as your pot is with in the lifetime limit you can take 25% free of any taxes. not just on the value of your contribution but the entire pot including your employers contributions which most schemes tend to be the lion's share,of the contributions...............But people have tried to use the genereous pension allowances for inheritance tax avoidance and now the death duties taxation have caught up with those shemes and put all your estate whether it be cash, property, pension on a catch everything basis of taxation..
Why should an estate which has money stashed away in a pension pot be treated any differently to other assets eg house, shares, cash upon your death, seems unjust to those that don't have money in pension pots but in their house or whatever.....it now .seems more equitable to me.....it's an entirely different debate about the existence of death duties,.....but if we are to have them, then its applied equitably to everything.
The total cost to the UK Exchequer of tax and National Insurance relief on pension contributions is estimated at £59.1 billion for the 2025/26 tax year, according to HM Revenue & Customs (HMRC)
Breakdown of the CostsIncome Tax Relief:
Estimated at £33.5 billion for 2025/26 (with historical breakdowns showing roughly 57% benefiting higher-rate taxpayers and 14% benefiting additional-rate taxpayers).National Insurance Contributions (NICs) Relief:
Estimated at £25.6 billion for 2025/26, which includes employer contributions and salary sacrifice arrangements.
That £59.1 bn per year in tax relief would help finance and sort a lot of our current problems out.....might eventually lead to not requiring death duties.......
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