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Introduction

For many years the UK has operated a system which encourages private pension provision through a system of tax reliefs.

Pensions taxation lifecycle

The taxation life cycle of private pension arrangements can broadly be divided into three stages. At each point there are tax implications for the member and, where applicable, the member’s employer.

Contributions ― payments are made into a fund. These payments are made by the individual members and, in many cases, by their employer as well. If the scheme is funded by contributions from the employer only, it is known as a ‘non-contributory scheme’.

The UK system is based