Question to the HM Treasury:
To ask Her Majesty's Government what plans do they have to implement legal obligations on employers (1) to select a suitable pension scheme for low-paid workers, and (2) to inform those workers about the lower take-home pay as a result of enrolling onto a Net Pay scheme.
The Government recognises the different impacts of the two systems of paying pension tax relief on pension contributions for workers earning below the personal allowance. The Government committed in its manifesto to review this issue and published a Call for Evidence on 21 July 2020. The Call for Evidence set out the Government’s views on proposals already put forward by stakeholders, invited further proposals, and sought views on the operation of the relief at source method of tax relief for pension contributions.
The Call for Evidence is now closed. The Government is carefully analysing this issue and the responses received to understand what deliverable options for change may exist. These responses have raised technical points that we are continuing to explore with HMRC and others. The Government will respond to the Call for Evidence in due course.