Retirement: Personal Savings

The Government wishes to encourage pension saving, to help ensure that people have an incomethroughout retirement. This is why, for the majority of savers, pension contributions are tax-free. This makes pensions tax relief one of the most expensive reliefs in the personal tax system, costing £78.2 billion in 2023/24.

The Government recognises the importance of promoting confidence in pension saving and is committed to ensuring future generations of pensioners have security in retirement. This is why the government announced a landmark two-phased review of the pensions system days after coming into office. The first phase, the Pensions Investment Review, focused on reforming the pensions landscape to boost savers’ pension pots. These reforms have been enacted through the Pension Schemes Act 2026. The second phase – the independent Pensions Commission – is building on these foundations and will make recommendations to the government on the broader questions of adequacy, fairness, and sustainability to guide the long-term future of our pensions system.