{"id":42601,"date":"2018-07-29T11:21:57","date_gmt":"2018-07-29T10:21:57","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=42601"},"modified":"2018-07-29T11:21:59","modified_gmt":"2018-07-29T10:21:59","slug":"the-wealthiest-in-the-uk-are-given-27bn-a-year-to-subsidise-their-savings-when-total-welfare-payments-are-just-125bn-a-year","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2018\/07\/29\/the-wealthiest-in-the-uk-are-given-27bn-a-year-to-subsidise-their-savings-when-total-welfare-payments-are-just-125bn-a-year\/","title":{"rendered":"The wealthiest in the UK are given \u00c2\u00a327bn a year to subsidise their savings when total welfare payments are just \u00c2\u00a3125bn a year"},"content":{"rendered":"

The Treasury Committee of the House of Commons published the following figure in its recent report<\/a> on savings, pensions and related issues:<\/p>\n

\"\"There are three things to note. First, the lower half of the income distribution (broadly earning less than \u00a324,000 pa<\/a>\u00a0in the year in question) get 10% of\u00a0all pension tax relief.<\/p>\n

The so-called\u00a0middle-income earners\u00a0(earning \u00a324,000 to about \u00a354,000 in that year) enjoy 40% of tax reliefs.<\/p>\n

And the top 10% of earners, all earning over \u00a354,000 pa) enjoy 50% of all tax relief.<\/p>\n

The total cost of the tax reliefs is as follows:<\/p>\n

\"\"<\/a><\/p>\n

The total comes to \u00a354.8 billion: the tax receipt offset is wholly\u00a0bogus accounting that is utterly unacceptable under any accounting convention.<\/p>\n

In other words, tax relief for those best off - which is nothing more than a straightforward state subsidy for their savings which increases the wealth divide in the UK as a result -\u00a0 costs \u00a327 billion a year.<\/p>\n

This needs to be put in context. In 2016\/17 the spending on welfare in the UK was approximately as follows<\/a>:<\/p>\n

\"\"<\/a><\/p>\n

Comparison should not be made with housing benefit - since the vast majority of that goes to landlords, most of whom will also be in the top 10% of\u00a0income earners.<\/p>\n

And it's hard to call pensions -which are paid almost universally - a welfare payment.<\/p>\n

Whilst unemployment\u00a0benefits are almost insignificant.<\/p>\n

The other benefits come to \u00a3125bn.<\/p>\n

And the best off get a sum equivalent to 20% of that just to boost their wealth.<\/p>\n

What is the logic to this? It's almost impossible\u00a0to discern.<\/p>\n

The Treasury Committee suggests reform to pension tax relief, giving it at a flat rate.<\/p>\n

I am beginning to question why it is given at all.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Treasury Committee of the House of Commons published the following figure in its recent report on savings, pensions and related issues: There are three
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