Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Lord Bates on 13 December 2017 (HL3799), what estimate they have made of the number of people aged (1) 50–59, (2) 60–69, (3) 70–79, (4) 80–89, and (5) 90 or over, who own ISAs; and for each age group, what is the monetary value of the average holding.
Answered by Lord Agnew of Oulton
The number of people in the age bands (1) 50–59, (2) 60–69, (3) 70–79, (4) 80–89, and (5) 90 or over, who own ISAs; and the average holding is set out in the table below for the most recent year for which we have data (2016/2017):
ISA Holders (16/17) | Numbers: thousands |
| |
| Age | Total Number of ISA holders | Average ISA Market Values |
| 50-59 | 4,100 | £26,900 |
| 60-69 | 3,900 | £41,600 |
| 70-79 | 3,000 | £47,400 |
| 80-89 | 1,400 | £48,300 |
| 90 and over | 300 | £51,000 |
| Total1 | 21,200 | £27,600 |
Footnotes | |||
1 Total is for all ages, including those not shown in the table. | |||
This table is based on information used in HMRC Individual Savings Account (ISA) statistics, which is available on the Gov.uk website.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what percentage of pensioners paid tax at (1) 40 per cent, and (2) 45 per cent, in the last tax year.
Answered by Lord Agnew of Oulton
The answer given on 15th July 2019 to HL 16778, contains the information requested for the last tax year, 2018-19, and remains HM Revenue and Customs’ most recent estimate of the data requested.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many (1) employers, and (2) pension scheme members, have received too much tax relief due to incorrect pension contributions being made as a result of confusion between (a) Relief at Source, and (b) Net Pay, arrangements.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
Employers have not been given too much or too little tax relief as employers do not receive tax relief under net pay or relief at source (RAS) arrangements.
The information about members is not readily available in the form requested and could only be provided at disproportionate cost.
Errors made by employers and pension providers have resulted in pension scheme members receiving either no tax relief on their pension contributions, or receiving tax relief twice.
In the Pension schemes newsletter 105 (November 2018), HMRC invited pension schemes who think that any of their members have been given the wrong amount of tax relief to email HMRC. HMRC would then work with the scheme to help correct their tax position.
HMRC is continuing to work with the pension schemes that have informed if an error has been made, but is unable to give more detail of these cases as this could prejudice future HMRC compliance activity.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, with respect to the National Statistics data published in April, which estimated the total cost of pension tax relief in respect of registered pension schemes for the year ending 5 April 2018 at £36.3 billion including £4.3 billion in tax relief on employee contributions to occupational pension schemes, (1) what is the estimated figure of gross pension contributions on which this figure was based, and (2) what specific assumptions were made as to the rates of tax applicable in arriving at the figure of £4.3 billion; and whether these assumptions included that all employees making contributions to occupational schemes receive the full tax relief to which they are entitled, including those contributing to net pay pension schemes.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
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.
These estimates were revised on 26th 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.
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).
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 26th 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.
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).
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.
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.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what estimate they have made of the amount of tax relief forgone in net pay pension schemes by workers earning below the personal tax threshold while contributing to workplace pensions in the past three tax years.
Answered by Earl of Courtown - Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)
Members of net pay pension schemes receive tax relief on their pension contributions at their marginal rate as these contributions are deducted before tax is calculated. Those individuals with income below the personal tax threshold do not pay tax.
Members of relief at source pension schemes, however, receive a 20% basic rate top up on their pension contribution, even though they do not pay tax.
The Economic Secretary to the Treasury provided the Work and Pensions committee an estimate of the cost of providing the same type of top-up as exist for those in relief at source scheme to those in net pay schemes. This estimate was around £100m per tax year.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what plans they have, if any, to continue with the rollout of their Simple Assessment and dynamic coding projects, which were paused in May 2018.
Answered by Lord Young of Cookham
HM Revenue & Customs (HMRC) delivered Simple Assessment to a small number of customers in 2017. Due to the need to prioritise EU exit, HMRC temporarily suspended further work to extend the service to a larger number of customers. The service remains active for the original user base, and further enhancements are being made this financial year. HMRC are reviewing whether to make further investments into the service in the context of the Spending Review.
HMRC have long had a delivery plan for the dynamic coding-out of debt project. The service was successfully introduced for a number of taxation scenarios that cause an over- or under-payment of PAYE.
After the closure of the Making Tax Digital for Individuals Programme, which included a wider dynamic coding option, and resource reallocation to EU exit, a new IT solution was required for this Budget 2017 project. HMRC remain committed to delivering this project. Further work on the wider dynamic coding activities will be considered as part of wider Spending Review planning.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the use of Real Time Information (RTI) to ensure low earners receive the tax relief they are due; and what plans they have to require all employers to use RTI.
Answered by Lord Young of Cookham
Information filed by employers through RTI is applied equally to all relevant customer records. HM Revenue & Customs (HMRC) do not make a distinction between low and high earners when applying rules within tax calculations.
Employers who pay all of their employees under the Lower Earnings Limit for National Insurance Contributions (NICs) and have no tax deducted are not required to register with HMRC. The employer is not required to report information to HMRC until there is a tax or NICs deduction payable to HMRC.
There are no plans to mandate employers who pay small amounts of wages to all of their employees to register with HMRC.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what are the number and percentage of pensioners with annual incomes above £50,000, broken down by age, in each of the last three years.
Answered by Lord Young of Cookham
For this answer pensioners have been defined as those over State Pension Age (SPA). The definition used is consistent with average SPAs from HMRC’s published Income Tax Liabilities Statistics. The average female SPA for the purposes of this are 63.75 years in 2016-17 and 64.5 years in 2017-18 (the male SPA is 65 in both). The average male and female SPA in 2018-19 is 65.25.
i)
Estimates of the number of pensioners who had tax liabilities at the 40% and 45% rates of income tax:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
40% | 537 | 514 | 508 |
45% | 34 | 35 | 37 |
i)
Estimates of the number of pensioners who had an annual income above £50,000 as:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
Male | 311 | 342 | 361 |
Female | 107 | 110 | 113 |
Total | 418 | 451 | 474 |
ii)
Of these pensioners with income above £50,000, the age ranges are:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
60-64 | 9 | 5 |
|
65-69 | 170 | 171 | 170 |
70-74 | 108 | 131 | 145 |
75+ | 131 | 143 | 158 |
The number of 60-64 year old Pensioners reduces to zero by 2018-19 reflecting the increasing SPA for females over the time period shown.
The figures for 2016-17 are based on the latest outturn data from the Survey of Personal Incomes (SPI), 2017-18 and 2018-19 are projections based on the 2016-17 SPI, which are projected using economic assumptions consistent with the Office for Budget Responsibility’s (OBR) March 2019 Economic and Fiscal Outlook.
For comparison to the total population of pensioners, Office of National Statistics (ONS) estimates of the population of the UK give the number of individuals by age. The number of pensioners in the UK can also be estimated using the average state pension age in each tax year:
12.3 million in 2016-17
12.2 million in 2017-18
12.0 million in 2018-19
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what is (1) the total number, and (2) the percentage, of pensioners who had an annual income above £50,000 in each of the last three years; and whether they have a gender breakdown for those data.
Answered by Lord Young of Cookham
For this answer pensioners have been defined as those over State Pension Age (SPA). The definition used is consistent with average SPAs from HMRC’s published Income Tax Liabilities Statistics. The average female SPA for the purposes of this are 63.75 years in 2016-17 and 64.5 years in 2017-18 (the male SPA is 65 in both). The average male and female SPA in 2018-19 is 65.25.
i)
Estimates of the number of pensioners who had tax liabilities at the 40% and 45% rates of income tax:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
40% | 537 | 514 | 508 |
45% | 34 | 35 | 37 |
i)
Estimates of the number of pensioners who had an annual income above £50,000 as:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
Male | 311 | 342 | 361 |
Female | 107 | 110 | 113 |
Total | 418 | 451 | 474 |
ii)
Of these pensioners with income above £50,000, the age ranges are:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
60-64 | 9 | 5 |
|
65-69 | 170 | 171 | 170 |
70-74 | 108 | 131 | 145 |
75+ | 131 | 143 | 158 |
The number of 60-64 year old Pensioners reduces to zero by 2018-19 reflecting the increasing SPA for females over the time period shown.
The figures for 2016-17 are based on the latest outturn data from the Survey of Personal Incomes (SPI), 2017-18 and 2018-19 are projections based on the 2016-17 SPI, which are projected using economic assumptions consistent with the Office for Budget Responsibility’s (OBR) March 2019 Economic and Fiscal Outlook.
For comparison to the total population of pensioners, Office of National Statistics (ONS) estimates of the population of the UK give the number of individuals by age. The number of pensioners in the UK can also be estimated using the average state pension age in each tax year:
12.3 million in 2016-17
12.2 million in 2017-18
12.0 million in 2018-19
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what percentage of pensioners paid tax at (1) the 40 per cent, and (2) the 45 per cent, rate in each of the last three years.
Answered by Lord Young of Cookham
For this answer pensioners have been defined as those over State Pension Age (SPA). The definition used is consistent with average SPAs from HMRC’s published Income Tax Liabilities Statistics. The average female SPA for the purposes of this are 63.75 years in 2016-17 and 64.5 years in 2017-18 (the male SPA is 65 in both). The average male and female SPA in 2018-19 is 65.25.
i)
Estimates of the number of pensioners who had tax liabilities at the 40% and 45% rates of income tax:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
40% | 537 | 514 | 508 |
45% | 34 | 35 | 37 |
i)
Estimates of the number of pensioners who had an annual income above £50,000 as:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
Male | 311 | 342 | 361 |
Female | 107 | 110 | 113 |
Total | 418 | 451 | 474 |
ii)
Of these pensioners with income above £50,000, the age ranges are:
Numbers: thousands
| 2016-17 | 2017-18 | 2018-19 |
60-64 | 9 | 5 |
|
65-69 | 170 | 171 | 170 |
70-74 | 108 | 131 | 145 |
75+ | 131 | 143 | 158 |
The number of 60-64 year old Pensioners reduces to zero by 2018-19 reflecting the increasing SPA for females over the time period shown.
The figures for 2016-17 are based on the latest outturn data from the Survey of Personal Incomes (SPI), 2017-18 and 2018-19 are projections based on the 2016-17 SPI, which are projected using economic assumptions consistent with the Office for Budget Responsibility’s (OBR) March 2019 Economic and Fiscal Outlook.
For comparison to the total population of pensioners, Office of National Statistics (ONS) estimates of the population of the UK give the number of individuals by age. The number of pensioners in the UK can also be estimated using the average state pension age in each tax year:
12.3 million in 2016-17
12.2 million in 2017-18
12.0 million in 2018-19