Four out of five respondents believe tax relief in its current form is an effective incentive to save. Many commentators suggested it was the only thing that encouraged people to lock their money away in long-term saving vehicles.
Several respondents also noted that tax relief on contributions simply recognised the fact that pensions were deferred pay.
"If you remove this incentive, there is no point in saving for a pension as opposed to, for example, an ISA," said a contributor. "We might as well just shut up shop and all go home."
One fan of tax relief said it was "the fundamental driver to sell" pension schemes.
Another commentator added: "Tax relief is mainly tax deferral. The big tax gain is the 25% tax-free cash and, for higher rate tax payers, avoiding a 40% tax on contributions and probably only paying 20% tax on the ultimate pension."
But a number of concerns were raised. Some contributors accused the government of weakening this incentive by tampering with it and others pointed out that it worked best for people who had least need of incentives.
"The problem is the word ‘currently'," explained a respondent. "The way the government is constantly threatening to review all taxation aspects of pensions creates uncertainty. What we need to encourage savers is stability. Promising to leave pensions alone would, in my opinion, be a bigger incentive for people to save!"
One critic added that the drive to increase the income tax threshold and "providing benefits disguised as tax credits" meant tax relief was becoming meaningless for the low paid who most needed to save.
Others suggested that the incentive was not as strong as it could be because members were not aware of the value of tax relief. This reflected findings from B&CE earlier this month that found almost half of scheme members were unaware of it (www.professionalpensions.com/2260932).
"It is less effective than it could be as most people don't understand the true benefit of tax relief on their pension savings," explained one contributor.
Suggesting an alternative model, a respondent said: "If there is no tax relief on contributions then benefits would need to be tax-free to be neutral, but could we trust a future government not to tax twice?"
