Monday, August 17, 2015

Treasury Consultation on Strengthening Savings Incentives

See below for an interesting request for  consultation on improving incentives to save in the UK. Clearly many of the aspects of this are relevant to people interested in research on behavioural economics of savings and related literatures.

HM Treasury. July 2015. Strengthening the incentive to save: a consultation on pensions tax relief.
The government wants to make sure that the right incentives are in place to encourage saving into pensions. 
The government is therefore consulting on whether there is a case for reforming pensions tax relief to strengthen incentives to save and offer savers greater simplicity and transparency, or whether it would be best to keep with the current system. 
Once the consultation closes on 30 September 2015 the government will consider all responses and publish a ‘summary of responses’. This will set out how the government intends to proceed. 
The government would particularly, but not exclusively, be interested to hear from:
- individuals
- consumer groups
- employers
- providers of pension products
- the wider pensions industry
From the consultation document, here are the questions they are interested in:

1 To what extent does the complexity of the current system undermine the incentive for individuals to save into a pension?

2 Do respondents believe that a simpler system is likely to result in greater engagement with pension saving? If so, how could the system be simplified to strengthen the incentive for
individuals to save into a pension?

3 Would an alternative system allow individuals to take greater personal responsibility for saving an adequate amount for retirement, particularly in the context of the shift to defined contribution pensions?

4 Would an alternative system allow individuals to plan better for how they use their savings in retirement?

5 Should the government consider differential treatment for defined benefit and defined contribution pensions? If so, how should each be treated?

6 What administrative barriers exist to reforming the system of pensions tax, particularly in the context of automatic enrolment? How could these best be overcome?

7 How should employer pension contributions be treated under any reform of pensions tax relief?

8 How can the government make sure that any reform of pensions tax relief is sustainable for
the future?

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