Improving the current pensions system is better than significant change, according to the findings of survey from the PMI.

Conducted over summer 2015 among the PMI's members, including managers, lawyers, actuaries, consultants and administrators, the survey results revealed that 55% of members said the tax relief system should not be changed.

Instead, many respondents said they are in favour of making changes to improve what is already in place.

The survey was conducted in relation to the government's on 'Strengthening the incentive to save: a consultation on pensions tax relief.'

PMI president said Kevin LeGrand said: 'The clearest message coming through is that auto-enrolment and pensions freedoms have provided a strong base on which to build and the industry would rather work on that than make any further radical changes.'

The survey found that PMI members would rather see what is currently in place simplified, with 52% placing importance on using just an annual allowance to control tax relief; while 48% favoured retaining the EET structure and moving to flat-rate relief.

Nearly two thirds (63%) of respondents do not believe that a simpler system of granting tax relief to pensions would encourage people to save more for retirement, and 74% feel that an alternative system would not enable people to plan better how they use their savings in retirement.

LeGrand said: 'Our members feel strongly that in order to sustain any reform of pension tax relief in the future, the government and industry should now focus on working together to ensure consensus on pensions policy and that appropriate financial product exist.'

There was little enthusiasm for the proposed move to a TEE tax system for pensions with almost unanimous agreement that such a system is incompatible with defined benefit provision.

A large majority, some 90%, of those questions want to stick with the EET model for employer pension contributions.

'The government's consultation on pension tax relief evokes a strong reaction from many people and given that the proposals would represent the most significant change to funded pension schemes in over 90 years, this is to be expected,' LeGrand said.

First published 16.10.2015

Lindsay.sharman@wilmingotnplc.com