Personal pensions scheme members' annual contributions have risen from £24.3 billion for 2015/16 to £24.6 billion for 2016/17, according to figures from HM Revenue & Customs (HMRC).
In addition the cost of registered pension scheme tax relief has risen slightly from £38.5 billion to £38.6 billion.
James Hender, head of private wealth at 2017 eprivateclient Top Accountancy Firm Saffery Champness, commented: “Pensions tax relief continues to be expensive for the Chancellor, and something which many in his position have found difficult to ignore – particularly as the economic belt tightens and government looks at ways to claw back costs.
“We have seen consistent encouragement of taxpayers, particularly higher earners, away from saving into traditional pensions and towards ISAs – which provide incumbent governments the boost of up-front income as post-tax cash is invested. ISA income is not taxable on receipt, so it is future generations which will have to pick up the tab for a cost saving measure now.
Mr Hender noted that the apparent discouragement of pension saving for higher earners has led to more of them seeing rental properties as a way to diversify which may be seen as a driver behind the increases in property prices in recent years.
“Despite the perennial temptation to crack into the pensions tax relief vault, Philip Hammond’s Spring Statement is unlikely to shake up the current system, although we shouldn’t rule out tweaks further down the line,” he concluded.
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