The National Association of Pension Funds (NAPF) has challenged industry assumptions in the government’s consultation on how to tax pension savings.
The industry organisation said it was aiming to inform the debate around tax relief on pension contributions, as the government considers its next step.
In the July Budget, the Conservative government announced a complete review of pensions tax relief.
It is considering moving away from providing relief on contributions and taxing retirement income, to taxing contributions and allowing tax-free income.
The NAPF said pension members needed to understand that taxing contributions would not necessarily mean more income for the government.
The organisation also said a move away from the current tiered system to a single rate of tax relief would not necessarily make the system fairer.
The NAPF said this move would produce a “relatively small additional benefit” for lower-income pension scheme members, while “greatly reducing the attractiveness” of pension savings for the 4.6m higher-rate tax-payers.
In other news, the number of active members saving in UK pension funds has increased by 2.4m since the rollout of auto-enrolment, reaching heights not seen since 2000, according to the Office for National Statistics (ONS).
Figures from the UK government statistics office showed active pension fund membership was 10.2m at the end of 2014, up from 8.1m a year earlier.
Pension fund membership had been steadily falling over the previous 15 years, with the 2014 figure now surpassing the 10.1m seen in 2000.
The advent of auto-enrolment saw private sector membership rise from 2.8m in 2013 to 4.9m in 2014.
Public sector membership also rose, by 0.1m to 5.4m.
The ONS also said the biggest increase in private sector membership was reported by defined contribution schemes, which rose by 2m to 3.2m.
Defined benefit membership remained stagnant at 1.6m.