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<p><del class="ministerial">It has not proved possible to respond to this question
in the time available before Prorogation. Ministers will correspond directly with
the Member.</del></p><p> </p><p><ins class="ministerial">HMRC publishes estimates
of the cost of pension tax relief which is available in table 6 of HM Revenue and
Customs Personal Pension Statistics on Gov.uk. </ins></p><p><ins class="ministerial"><em>
</em></ins></p><p><ins class="ministerial">These estimates were revised on 26<sup>th</sup>
September 2019 as part of an overall update to HMRC’s Personal Pension and Pension
Relief statistics. Estimates of the cost of tax relief on contributions are produced
using the Annual Survey of Hours and Earnings (ASHE) for income, individual and employer
contributions for members of pension schemes that use the net pay mechanism; and administrative
data HMRC holds on relief at source administrative data matched to the Survey of Personal
Incomes (SPI) - for income, individual and employer pension contributions for members
of pension schemes that use the relief at source mechanism.</ins></p><p><ins class="ministerial">
</ins></p><p><ins class="ministerial">The cost of tax relief for all contributions
made by individuals is approximately £6.3bn, broken down as the cost of relief on
employee contributions to occupational schemes (£4.2bn), to personal pension schemes
(£1.6bn), and self-employed contributions to pensions (£0.5bn). Occupational pensions
here includes some master trust pension schemes which use the relief at source method.
Personal pensions here includes workplace personal pension schemes (such as group
personal pensions).</ins></p><p><ins class="ministerial"> </ins></p><p><ins class="ministerial">i)
The £4.3bn figure referenced is the cost of pension tax relief relating to occupational
pension schemes. Estimates of the cost of pension tax relief were revised on September
26<sup>th</sup> 2019 as part of an overall update to HMRC’s Personal Pensions and
Pension Relief Statistics. The £4.3bn figure referenced has since been revised to
£4.2bn. </ins></p><p><ins class="ministerial"> </ins></p><p><ins class="ministerial">This
£4.2bn figure of tax relief is derived from around £15.9bn of estimated “relievable”
individual pension contributions to occupational pension schemes, (where “relievable”
refers to our best estimates of contributions which are within the individual’s pensions
Annual Allowance). </ins></p><p><ins class="ministerial"> </ins></p><p><ins class="ministerial">ii)
Marginal rate tax relief is applied to these estimates of “relievable” contributions
as if these contributions were taxed. Estimates are produced assuming all members
contributing to all pension schemes receive full marginal rate tax relief on their
contributions.</ins></p><p><ins class="ministerial"><em> </em></ins></p><p><ins class="ministerial">As
noted in the publication, costs are subject to large revisions and have a particularly
wide margin of error – reflecting the variety of sources of data (both administrative
and survey) required to produce these estimates.</ins></p>
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