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 Total Government receipts are forecast to be 37.0% of national income in 2010-11, up 0.5% of national income from the 36.4% (numbers do not sum due to rounding) Labour inherited. In today's terms this increase is equivalent to £7.5 billion or £230 per family in the UK. Over this period most other industrial countries have reduced their tax burden. Out of 28 industrial countries for which we have comparable data from the OECD in both years, the UK had the 8 th lowest tax burden in 1997 whereas by 2010 it had the 13 th lowest. Had the UK seen its tax burden fall by the same proportion of national income as the unweighted average of the other 27 countries between 1997 and 2010 then, on this internationally comparable definition, the tax burden in 2010 would be 3.3% of national income below that currently forecast by the OECD for this year. This is equivalent to £49 billion in today's terms, or £1,520 per family in the UK. Despite the increase in the tax burden since Labour came to power, total government receipts on the Treasury's definition have averaged 37.5% of national income over the last 14 years, which is lower than the 40.2% average under the Conservatives between 1979 and 1997. As the economy recovers, and as tax raising measures that have already been announced are implemented to help reduce Government borrowing, the Treasury forecasts that total receipts will climb to 38.3% of national income by 2014-15. This would be 1.9% of national income above the level that Labour inherited from the Conservatives, but still below the average experienced under the Conservatives. In today's terms the increase in the tax burden since Labour came to power would then be equivalent to £27.5 billion or £860 per family in the UK. Despite the financial crisis leading to the lowest rate of growth in national income over a fiveyear period since the second world war, the sharp fall in tax revenues means that national income minus tax revenues is still projected to continue growing -in other words people's incomes are being cushioned from the impact of the recession on the wider economy. This is in contrast to the experience of the early-to-mid 1980s or the late 1960s. The direct net impact of measures announced in Budgets and Pre-Budget Reports since Labour came to power has been to increase tax revenues in 2010-11 by £31.1 billion. This is equivalent to an average of £970 per family in the UK. By 2014-15 this is set to increase by almost half as much again, to £45.4 billion, which is equivalent to £1,420 per family. The increases in the headline tax burden are smaller than the net revenue raised by measures announced under Labour in Budgets and Pre-Budget Reports. This reflects weak economic performance depressing receipts, plus other economic factors, such as the financial crisis reducing the size of the hitherto relatively profitable (and thus tax-rich) financial sector.1 This series of Election Briefing Notes has been funded by the Nuffield Foundation, grant OPD/36607. The Nuffield Foundation is an endowed charitabl...

Contents Executive summary 1. Introduction 2. Characteristics of the self-employed and pension membership 2.1 The changing characteristics of the working-age self-employed 2.2 Do changing characteristics explain trends in pension membership? 2.3 Changing pension saving among particular types of self-employed individuals 2.4 Summary 3. Have attitudes towards pensions changed among the self-employed? 3.1 Self-reported reasons for not saving in a pension 3.2 Attitudes towards pensions as an asset choice 3.3 Expected retirement income 3.4 Summary 4. Are the self-employed saving for retirement in other ways?

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.

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