The UK's pension rules are too generous

Our pension tax relief system makes absolutely no sense, says Merryn Somerset Webb. And the best way to fix it is to restrict the amount people can save for their retirement.

What is the point of providing tax relief on pension contributions? The usual answer is that we want to encourage people to save for their old age. That's true of course, but what we rarely ask is why we want to do this.

You might say that it is because we want to encourage them not to overspend on their present at the expense of their future; that we want to be sure people have a satisfying retirement; or that it is one of the marks of a civilised society that a working life ends in a degree of comfort.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.