IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Do up-front tax incentives affect private pension saving in the United Kingdom?

  • Rowena Crawford

    ()

    (Institute for Fiscal Studies)

  • Richard Disney

    ()

    (Institute for Fiscal Studies and University of Nottingham)

  • Carl Emmerson

    ()

    (Institute for Fiscal Studies)

Registered author(s):

    The paper examines how individuals respond to complex decision-making environments – in particular, whether up-front financial incentives are an effective policy lever to change behaviour. The paper argues that incentives differ in their transparency and in their complexity; individuals are more likely to respond to incentives that are both transparent and imply a large pay-off in terms of net income. The paper focuses on household ‘tax planning’ in the context of tax reliefs for retirement saving in the United Kingdom. It examines whether take-up of retirement saving instruments increases at the higher rate threshold for income tax, since tax relief is given at the marginal tax rate and should be more attractive to those just above this threshold than to those just below it. It then examines a more complex case where the tax system provides an incentive for pension saving to do be done by one member of a couple. Econometric results are obtained from the Family Resources Survey on these two tests of household responses to complex incentives.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.ifs.org.uk/wps/wp1205.pdf
    Download Restriction: no

    Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W12/05.

    as
    in new window

    Length:
    Date of creation: Mar 2012
    Date of revision:
    Handle: RePEc:ifs:ifsewp:12/05
    Contact details of provider: Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
    Phone: (+44) 020 7291 4800
    Fax: (+44) 020 7323 4780
    Web page: http://www.ifs.org.uk
    Email:


    More information through EDIRC

    Order Information: Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
    Email:


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Orazio P. Attanasio & Thomas DeLeire, 2002. "The Effect Of Individual Retirement Accounts On Household Consumption And National Saving," Economic Journal, Royal Economic Society, vol. 112(6), pages 504-538, July.
    2. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and taxation: theory and evidence," Finance and Economics Discussion Series 2009-11, Board of Governors of the Federal Reserve System (U.S.).
    3. Engen, Eric & Gale, William & Uccello, Cori, 1999. "The Adequacy of Household Saving," MPRA Paper 56442, University Library of Munich, Germany.
    4. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
    5. Kevin Milligan, 2000. "How Do Contribution Limits Affect Contributions to Tax-Preferred Savings Accounts?," Social and Economic Dimensions of an Aging Population Research Papers 27, McMaster University.
    6. Woojin Chung & Richard Disney & Carl Emmerson & Matthew Wakefield, . "Public policy and retirement saving incentives in the UK," Discussion Papers 06/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:12/05. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Seavers)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.