The government should introduce a 33 per cent flat rate of pension tax relief to convince more people to save for retirement, insurance group Zurich has claimed today.
The firm said a flat rate is a “long-term solution that gives consumers the certainty they need to save”.
Research conducted by YouGov for Zurich has shown that 69 per cent of over-55s said contributing to a pension from untaxed income was the most powerful incentive for them to save for retirement.
“Investing into a pension from untaxed income is a compelling incentive to lock away savings for the long-term,” said Gary Shaughnessy, Zurich UK Life boss.
“Removing such a valuable tax break, as the government is considering, would drive people away from retirement saving.”
He added: “Instead of scrapping pension tax relief, the government should reinforce its value by introducing a 33 per cent flat rate that would be a fairer, simpler and more sustainable solution for people of all incomes.”
He added that taxing pensions upfront like ISAs would weaken the culture of long-term retirement saving.