Will the hit on pensions tax relief affect savings?
The CBI says it will. Richard Lambert has said:
“Changing the higher-rate tax relief on pensions weakens incentives to save for retirement and is yet another change to a system which really needs stability.”
But as Tom at Labour and Capital shows there’s not much evidence that tax incentives make much difference. And it’s good to be reminded that the cost of tax relief is £20 billion a year. Today’s measure at £150 million is small beer.