Osborne Savers Bonus?
February 15th, 2016
Could Chancellor George Osborne pull another rabbit out of his Budget hat and introduce a ‘savers’ bonus’?, asks the Herald. It is widely expected that the Chancellor will change the system of tax relief on pensions, and if he were to redistribute much of the extra tax he collects through higher rate tax relief, he could deliver a better incentive for the majority of savers. At present basic rate taxpayers get £1 in tax relief for every £4 they pay into their pension schemes, but Osborne could – as several think-tanks have suggested – improve the incentive so that savers get £1 added to their scheme by the government for every £3 they pay in – equivalent to a rate of tax relief of 25% compared with the current rate of 20%.