1. introduction

The following tables provide the latest estimates of personal pension contributions based primarily on data that personal pension providers submit to HM Revenue and Customs (HMRC) using statistical reporting: Annual statistical returns for registered pension plans (APSS107).

Table 1 shows the contributions to personal pensions by source and type of contribution, annually since 1990 to 1991 according to the personal tax year.

The statistical information comes from the APSS107 declaration except for contributions to Retirement Annuity Contracts (BECAUSE) which are derived from the HMRC Personal Income Survey. Self-employed workers’ contributions are derived from more detailed information provided by pension providers indicating the status of plan members.

Table 2.1 shows the combined number of contributing plan members and the value of contributions analyzed by different categories of individual pension plans.

Table 2.2 shows the individual contributions of each type of sponsored program and stakeholder status.

Table 2.3 shows the employer contributions for each type of sponsored scheme and stakeholder status.

Table 2.4 shows the total contributions for each type of sponsored program and non-stakeholder program element of stakeholder status.

The information contained in these tables relates to individual pension plans to which contributions have been made either by the affiliate, his employer, or by means of a minimum government contribution (for subcontracted plans). Figures are released each September for contributions made in the personal tax year ending April 5 of the previous year.

The information is analyzed by personal tax year because contributions to personal pensions are eligible for tax relief at the taxpayer’s relevant marginal rate for the year. Personal pension contributions were paid out of taxable income. On the other hand, occupational pension contributions benefit from tax relief at source.

Individual contributions are shown in Tables 1 and 2.1 to 2.4, including the base rate tax relief claimed from HMRC by pension scheme operators on behalf of scheme members (although they are reported on a net basis on APSS107). Taxpayers at higher and additional rates must claim the unpaid element of the tax relief from HMRC. These additional amounts of relief are not treated as personal pension contributions.

Employer-sponsored plans include personal group pensions and contracts set up by an employer with a pension organization. Non-employer sponsored programs are contracts put in place by a financial institution and offered for sale to the public, and include programs run through unions or other organizations.

Individuals may have more than one personal pension and the information in Tables 1 and 2 relate to the number of plan accounts receiving a payout, not the number of plan members receiving a payout, which will be smaller.

Table 6 provides general estimates of the cost of tax breaks for occupational and personal pensions based on published national statistical aggregates and HMRC-derived estimates of the rate at which tax breaks are granted.

This cost covers reductions in employer and individual contributions for occupational and personal pensions, tax relief from the tax exemption of income and gains from investment funds, offset by the taxation of current pensions. Both public and private sector programs are included.

When preparing Table 6, employer pension contributions are treated as if they were part of compensation of employees and the tax relief follows from the fact that they are exempt from both employee income tax and national insurance contributions. Employer pension contributions are also exempt from employer national insurance contributions (although employee national insurance contributions are calculated before the allowance for pension contributions, so there is no element pension relief).

Table 6 is mainly based on aggregate contribution data on personal pensions from Table 1 and data on occupational pensions provided by the Office for National Statistics (ONS). These are then combined with the average marginal tax rates for individuals contributing to pensions to estimate the cost of the relief. The marginal tax rate estimates are taken from the HMRC Personal Income Survey.

2. Relevance

Relevance is the degree to which the statistical product meets user needs in terms of coverage and content.

The information supplements the data collected by the ONS on pension contributions.

The information published in Tables 1 and 2.1 to 2.4 is relevant in the context of understanding trends in the number of individuals putting up long-term savings, while Table 6 provides an overview of the cost of tax breaks for pensions in the past. the context of recent policy changes aimed at limiting the cost by imposing lifetime and annual abatement restrictions on the amounts eligible for the relief.

3. Precision and reliability

Precision is the proximity between an estimate and the unknown true value. Reliability is the consistency of the estimates.

The source data for producing Tables 1 and 2.1 to 2.4 are based on annual declarations that all individual pension providers are required to complete. Validity and credibility tests are carried out to ensure the accuracy of the statements and suspicious data is queried with the pension provider. The results are compared to the base rate tax relief amounts reimbursed to pension plans to ensure consistency. The accuracy of Table 6 is largely determined by the accuracy of the overall contribution information in Table 1 and provided by the ONS and the Personal Income Survey (SPI).

4. Punctuality and punctuality

Timeliness and punctuality refer to the time interval between the publication and the reporting period, and the gap between the planned and actual publication dates, respectively.

These statistics are published each year according to a pre-announced schedule in accordance with the National Code of Good Practice for Statistics. Release dates are announced on the HMRC National Statistics website.

The source data for the production of Tables Table 1 and 2.1 to 2.4 are based on annual declarations that all individual pension providers are required to complete. Validity and credibility tests are carried out to ensure the accuracy of the statements and suspicious data is queried with the pension provider. The results are compared to the base rate tax relief amounts reimbursed to pension plans to ensure consistency.

The accuracy of Table 6 is largely determined by the accuracy of the overall contribution information in Table 1 and provided by the ONS and the SPI.

5. Accessibility and clarity

Accessibility is the ease with which users can access data, also reflecting the format in which the data is available and the availability of supporting information. Clarity refers to the quality and sufficiency of the metadata, illustrations and accompanying advice.

Statistics are published in HTML and SACO (OpenDocument Spreadsheet) and are free for all users.

There is also additional information that gives the context of each table, methodologies, hyperlinks for references, contact details and comments.

6. Consistency and comparability

Consistency is the degree to which data that is derived from different sources or methods, but relates to the same subject, is similar. Comparability is the degree to which data can be compared over time and across domain.

Historical data for pension contributions (Table 1) goes back to 1990 to 1991. Lifetime and annual contribution limits apply to the tax breaks available on pension contributions and these limits have been declining in recent years. However, there is no estimate of the effect this might have had on contributions to the individual pension plan.

7. Assessment of user needs and perceptions

The processes of knowledge of users and uses, and their opinions on statistical products.

There is a link for clients to provide feedback and comments on the Statistics at HMRC website.

There are regular contacts with HMRC and HM Treasury (HMT) colleagues to ensure that the data collected from the APSS107 meets their information needs.

8. Performance, cost and respondent burden

The effectiveness, efficiency and economy of statistical production.

Information requested on the APSS107 from individual pension providers is likely to be readily available from their management information systems.

The annual burden on the guarantor to complete and return the forms is likely to be around £ 50,000 to £ 75,000.

There are no internal cost estimates for HMRC to process returns, but forms are entered centrally and processed electronically, which minimizes preparation and publication costs. The information is used to provide checksums for account level information collected separately electronically from pension providers.

9. Confidentiality, transparency and security

The procedures and policy used to ensure confidentiality, security and transparent practices.

All published figures are treated in accordance with HMRC’s privacy and access policy. There is no risk of disclosure in these statistics.