SSIA tax breaks are ‘adequate’

EXTRA tax incentives to encourage Special Savings Incentive Account (SSIA) holders invest in pensions would be too generous, according to confidential Government briefing documents prepared in the run-up to last year’s Budget.

PRSAs aimed to bring the number of people with a private pension up from 50% to 70% of the workforce, but they have been criticised by several pensions’ providers for failing to take off and attract widespread interest.

“The rate of sales would need to increase if PRSAs are to push the coverage level from 50% of employees to 70%,” the paper said. But it also said extra tax incentives, including those geared towards SSIAs when they mature next year, were not guaranteed to improve things. “Even if there is a slow take-up it is by no means clear the problem derives from insufficient incentives or that additional incentives would resolve the matter,” the group was told.