Tax Relief Boost Pensions By £44 Billion

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Retirement savers saw their pensions boosted by £43.7 billion by The Treasury last year, according to the latest official data.

The figure was £2 billion up on the year before.

The money is paid as tax relief to employees and employers on pension contributions.

Chancellor Phillip Hammond is known to regard the relief as ‘eye wateringly expensive’ but has not followed his predecessor George Osborne in attempting to abolish the payment seen as a reward for people setting money aside to fund their retirement.

“While rumours of radical tax relief reform will inevitably surface once again in 2019 – particularly in the event of a potentially damaging no deal Brexit – policymakers need to consider the impact any changes would have on the fragile savings culture being fostered in the UK as a result of automatic enrolment,” said Tom Selby, senior analyst at pension and investment platform AJ Bell,

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“Tax relief is one of the key incentives offered to savers in return for locking their money away until age 55. Raiding tax relief to fund short-term spending could cause people to reconsider the value of this deal, potentially reducing savings levels and storing up more problems for the future.”

The data published by HM Revenue & Customs also revealed savers paid £27.2 billion in to their pensions and ISAs.

How much money do you need to be rich?

Meanwhile, data from the government’s UK Personal Wealth Statistics puts a number on how much cash someone needs to be wealthy.

The data reveals £530,000 is the magic figure.

Only 10% of estates paying inheritance tax are for amounts over £530,000, while just 2.6% of the population had estates with a net worth of more than £1 million.

Net worth is totting up everything someone owns, then subtracting their debts.

The richest group held around 25% of the nation’s wealth, while the top 10% control around 44%.

Property accounts for just over half of the nation’s wealth (52.5%) and three out of four deceased’s estates included property.

The wealthiest men – averaging fortunes of £376,500 – were aged between 45 and 64 years old, while for women, the age was 65 and over. There average wealth was £303,900.

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