Savers face a complex and changing array of different tax treatments. These differences are big and can make the cost of choosing the ‘wrong’ savings vehicle very large. In addition apparently small differences in fees and charges can outweigh the effects of different tax treatments. Meanwhile pension auto-enrolment arrangements, which compel matching contributions from employers, will make saving through pensions auto-enrolment much more attractive than almost any other option with the same underlying return.
These are among the main findings of new work by IFS researchers on how taxes and charges can affect the attractiveness of different forms of savings.
Authors
Stuart Adam
Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.
Jonathan Shaw
Jonathan is a Research Fellow at the IFS and a Technical Specialist in the Economics Department at the Financial Conduct Authority.
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