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<p>Tax relief is granted on contributions to all registered pension schemes, including
workplace pensions. This relief can be provided for through two mechanisms: net pay
or relief at source.</p><p> </p><p>Where a scheme operates the net pay mechanism,
contributions are deducted from pay before any tax is applied. This approach applies
to all members of the scheme including those earning (1) between £10,000 and £11,000
a year from their employer, and (2) below £10,000 a year from one or more employers.
The pension provision would depend on these contributions as well as those made by
the employer.</p><p> </p><p>The Government appreciates the impacts on low paid workers
whose employers use a net pay arrangement pension scheme. However, it has not been
possible to identify any straightforward or proportionate means to align the effects
of the net pay and relief at source mechanisms more closely for this population.</p>
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