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

Rowena Crawford, Richard Disney () and Carl Emmerson ()
Additional contact information
Richard Disney: Institute for Fiscal Studies and University of Sussex
Carl Emmerson: Institute for Fiscal Studies and Institute for Fiscal Studies

No W12/05, IFS Working Papers from Institute for Fiscal Studies

Abstract: 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.

Date: 2012-03-20
New Economics Papers: this item is included in nep-acc and nep-age
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.ifs.org.uk/wps/wp1205.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.ifs.org.uk/wps/wp1205.pdf [301 Moved Permanently]--> https://www.ifs.org.uk/wps/wp1205.pdf [302 Found]--> https://ifs.org.uk/wps/wp1205.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ifs:ifsewp:12/05

Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Access Statistics for this paper

More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().