Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, according to the data gathered by the HM Revenue and Customs Real Time Information programme, how many (1) women and (2) men earning below the personal income tax threshold were contributing at work to a relief at source pension scheme in the last three years; and whether they have estimates of these numbers for the current year.
Answered by Lord Young of Cookham
HM Revenue and Customs can provide estimates of the number of women and men earning income below the personal allowance threshold who contribute to a net pay or a relief at source pension scheme over a three year period. These figures are set out in the table below.
These figures are produced using HMRC’s Real Time Information data to identify taxpayers who contribute to relief at source and net pay pension schemes, which is then combined with the Survey of Personal Incomes to obtain information on income and gender. The most recent tax/year for which these estimates are available is 2016/17.
Number of individuals earning below the Personal Allowance making workplace pension contributions into net pay and relief at source pension schemes (Figures are in thousands)
| 2014/15 | 2015/16 | 2016/17 |
Net Pay | |||
Female | 800 | 900 | 1,000 |
Male | 300 | 300 | 300 |
Total | 1,100 | 1,200 | 1,300 |
Relief at Source | |||
Female | 400 | 500 | 700 |
Male | 300 | 300 | 400 |
Total | 600 | 900 | 1,100 |
Note: (1) Personal Allowances for the respective tax years: £10,000 in 2014/15, £10,600 in 2015/16 and £11,000 in 2016/17; (2) Figures are rounded to neared 100 thousand; (3) Figures by gender may not sum to total due to rounding
Source: Real Time Information and Survey of Personal Income Data for 2014/15, 2015/16 and 2016/17.
There may be individuals who have both relief at source and net pay pension schemes. The relief at source pension schemes data only shows individuals who are part of an employer-sponsored or provided pension scheme.
An estimate of the number of disabled people who earn less than the personal allowance and are contributing to a net pay pension scheme is not available. The relevant HM Revenue and Customs’ administrative data does not contain information on disability.
An estimate for the number of taxpayers with relief at source pensions who fail to claim higher rate tax relief, and how much higher rate tax relief is unclaimed each year, is not available.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, according to the data gathered by the HM Revenue and Customs Real Time Information programme, how many (1) women, and (2) men earning below the personal income tax threshold were contributing at work to a net pay pension scheme in the last three years; and whether they have estimates of these numbers for the current year.
Answered by Lord Young of Cookham
HM Revenue and Customs can provide estimates of the number of women and men earning income below the personal allowance threshold who contribute to a net pay or a relief at source pension scheme over a three year period. These figures are set out in the table below.
These figures are produced using HMRC’s Real Time Information data to identify taxpayers who contribute to relief at source and net pay pension schemes, which is then combined with the Survey of Personal Incomes to obtain information on income and gender. The most recent tax/year for which these estimates are available is 2016/17.
Number of individuals earning below the Personal Allowance making workplace pension contributions into net pay and relief at source pension schemes (Figures are in thousands)
| 2014/15 | 2015/16 | 2016/17 |
Net Pay | |||
Female | 800 | 900 | 1,000 |
Male | 300 | 300 | 300 |
Total | 1,100 | 1,200 | 1,300 |
Relief at Source | |||
Female | 400 | 500 | 700 |
Male | 300 | 300 | 400 |
Total | 600 | 900 | 1,100 |
Note: (1) Personal Allowances for the respective tax years: £10,000 in 2014/15, £10,600 in 2015/16 and £11,000 in 2016/17; (2) Figures are rounded to neared 100 thousand; (3) Figures by gender may not sum to total due to rounding
Source: Real Time Information and Survey of Personal Income Data for 2014/15, 2015/16 and 2016/17.
There may be individuals who have both relief at source and net pay pension schemes. The relief at source pension schemes data only shows individuals who are part of an employer-sponsored or provided pension scheme.
An estimate of the number of disabled people who earn less than the personal allowance and are contributing to a net pay pension scheme is not available. The relevant HM Revenue and Customs’ administrative data does not contain information on disability.
An estimate for the number of taxpayers with relief at source pensions who fail to claim higher rate tax relief, and how much higher rate tax relief is unclaimed each year, is not available.
Asked by: Stephen Timms (Labour - East Ham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, whether universal credit claimants are able to deduct the tax relief claimed by relief at source pension schemes from their earned income figure to calculate their award of universal credit.
Answered by Alok Sharma - COP26 President (Cabinet Office)
100% of contributions to employer pension schemes, whether Net or Relief at Source pensions, will be taken into account when calculating the level of employed earnings in UC. This means that a UC claimant that contributes to either type of pension will, automatically (where employers report the information correctly), have their UC entitlement calculated on their taxable pay, after their pension contribution. This ensures fairness for all affected UC employed claimants.
If there is some discrepancy in the way in which it’s reported, DWP will manually ensure that the Relief at Source pension contribution is deducted before any UC entitlement is calculated on their employed earnings.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government how many employers have been asked to repay overpaid tax relief as a result of employers submitting pension contributions which incorrectly based their payments on the wrong assumption about whether the pension scheme used Relief at Source or Net Pay for administering tax relief.
Answered by Lord Bates
Errors made by employers and pension providers have resulted in individuals 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 them to help correct their tax position.
HMRC is working with pension schemes and can’t give more detail of the dealing of these cases as this could prejudice future compliance activity.
Asked by: Paul Farrelly (Labour - Newcastle-under-Lyme)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, with reference to the report entitled Families and Food in Hard Times: rising food poverty and the importance of children's experience, published by SPERI in 2018, what steps her Department is taking to ensure that wages and social benefits are in combination adequate to provide socially acceptable levels of eating and living.
Answered by Justin Tomlinson - Minister of State (Department for Energy Security and Net Zero)
Every Government needs to balance the generosity of benefit levels with affordability to the taxpayer and making sure that work pays. This Government continues to spend over £95bn a year on welfare. Since 2016, we have invested an additional £1.7bn a year in Universal Credit, through a reduction in the taper rate, increasing the work allowances for households with children and disabled people and providing additional support for people moving onto UC from existing benefits.
This Government has also made sure that work pays. The National Living Wage, rising to £8.21 an hour from April 2019, has given the UK’s lowest earners their fastest pay rise in 20 years. We have cut income tax for over 31 million people and taken four million low earners out of income tax altogether. A typical basic-rate taxpayer now has over £1,000 less in income tax than in 2010. Compared with 2010, there are now over 3.5 million more people in work, 1,024,000 fewer workless households, and, at a near record low, 665,000 fewer children living in workless households This means more families are getting more of their income through earnings. Working Age households and households with children in the bottom 20% of the income distribution now get just over half of their income from employment, up from just over 40% in 2010.
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Sources of household income by income quintile (Before Housing Costs) for households not containing pensioners, plus households containing both pensioners and children, United Kingdom |
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Source, Households Below Average Income, DWP |
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Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Baroness Buscombe on 31 October (HL10750), how many (1) women, and (2) men, recorded by the HMRC Real Time Information record, are contributing at work to a relief at source pension scheme.
Answered by Lord Bates
HMRC estimates that 1.2m individuals earning below the personal allowance in 2015/16 made workplace pension contributions, reported via Real Time Information (RTI), using net pay arrangements. Around 74% of these individuals are estimated to be female and 26% are estimated to be male.
HMRC estimates that a total of 5.5m individuals made workplace pension contributions using relief at source, reported via RTI in 2015/16. Around 45% of these individuals are estimated to be female and 55% are estimated to be male.
HMRC’s Survey of Personal Income (SPI) was used to estimate earnings for these individuals. The latest information available on individual earnings is published for 2015/16.
The personal allowance in 2015/16 was £10,600, not £11,850, which is the current personal allowance for 2018-19.
(Estimates are rounded to the nearest 100,000)
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government, further to the Written Answer by Baroness Buscombe on 31 October (HL10750), how many (1) women, and (2) men, recorded by HMRC Real Time Information record, who earnt below £11,850 were contributing at work to a net pay pension scheme.
Answered by Lord Bates
HMRC estimates that 1.2m individuals earning below the personal allowance in 2015/16 made workplace pension contributions, reported via Real Time Information (RTI), using net pay arrangements. Around 74% of these individuals are estimated to be female and 26% are estimated to be male.
HMRC estimates that a total of 5.5m individuals made workplace pension contributions using relief at source, reported via RTI in 2015/16. Around 45% of these individuals are estimated to be female and 55% are estimated to be male.
HMRC’s Survey of Personal Income (SPI) was used to estimate earnings for these individuals. The latest information available on individual earnings is published for 2015/16.
The personal allowance in 2015/16 was £10,600, not £11,850, which is the current personal allowance for 2018-19.
(Estimates are rounded to the nearest 100,000)
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government who is responsible for ensuring that employers do not use net pay pension schemes for staff who earn below the personal tax thresholds.
Answered by Baroness Buscombe
Automatic enrolment is a great success story with more than 9.9 million workers enrolled into workplace pension saving and over 1.3 million employers meeting their duties to date.
Under automatic enrolment the employer is responsible for putting in place a qualifying workplace pension scheme for their eligible workers. Employers have a choice, in the marketplace, of a number qualifying workplace pension schemes that can be used to fulfil their automatic enrolment duties; including the National Employment Savings Trust (NEST). NEST has no set-up costs, and a public service obligation to accept any employer who meets their scheme’s terms and conditions.
The Pensions Regulator provides guidance to employers on choosing a pension scheme for their staff in order to discharge their statutory obligations under automatic enrolment. This provides information about the choice between net pay and relief at source schemes, and the implications of net pay schemes for employees who do not pay tax.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what steps they are taking to protect low earners from losing out on tax relief in automatic pension enrolment.
Answered by Baroness Buscombe
Automatic enrolment is a great success story with more than 9.9 million workers enrolled into workplace pension saving and over 1.3 million employers meeting their duties to date.
Under automatic enrolment the employer is responsible for putting in place a qualifying workplace pension scheme for their eligible workers. Employers have a choice, in the marketplace, of a number qualifying workplace pension schemes that can be used to fulfil their automatic enrolment duties; including the National Employment Savings Trust (NEST). NEST has no set-up costs, and a public service obligation to accept any employer who meets their scheme’s terms and conditions.
The Pensions Regulator provides guidance to employers on choosing a pension scheme for their staff in order to discharge their statutory obligations under automatic enrolment. This provides information about the choice between net pay and relief at source schemes, and the implications of net pay schemes for employees who do not pay tax.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government on what grounds they opted to automatically enrol low earners into a net pay pension scheme which forces them to pay 25 per cent more for their pension than they would do in a relief at source scheme.
Answered by Baroness Buscombe
Automatic enrolment is a great success story with more than 9.9 million workers enrolled into workplace pension saving and over 1.3 million employers meeting their duties to date.
Under automatic enrolment the employer is responsible for putting in place a qualifying workplace pension scheme for their eligible workers. Employers have a choice, in the marketplace, of a number qualifying workplace pension schemes that can be used to fulfil their automatic enrolment duties; including the National Employment Savings Trust (NEST). NEST has no set-up costs, and a public service obligation to accept any employer who meets their scheme’s terms and conditions.
The Pensions Regulator provides guidance to employers on choosing a pension scheme for their staff in order to discharge their statutory obligations under automatic enrolment. This provides information about the choice between net pay and relief at source schemes, and the implications of net pay schemes for employees who do not pay tax.