The government must "build upon" restrictions on pensions tax relief to help those less well off, the Trades Union Congress says.
In a report published today, Decent pensions for all, the union body said the cost of providing tax relief on pensions in 2007/8 was £37.6bn according to HMRC figures - ten times the net cost of unfunded public sector pension schemes, which it said were estimated by the Treasury to cost £4bn this year.
And it said pensions tax relief is heavily skewed towards the better off - explaining 60% of tax relief goes to higher rate taxpayers, including 25% to those earning more than £150,000 a year.
TUC General Secretary Brendan Barber urged the government to "build upon" restrictions on pensions tax relief - which will taper down tax relief to 20% for those on incomes above the £150,000 - it announced in its budget this year.
He said the money saved by such a move could help the nearly two-thirds (62.6%) of the private sector workforce who get no employer backed pension.
He said: "The real pension crisis is the growing numbers of workers in the private sector without any kind of pension, who are now paying almost £10bn a year to subsidise the pensions of the richest one per cent of the population.
"The employer backed campaign against public sector pensions is right that there is an unfair division between the public and private sectors. But it is a strange idea of fairness to argue that because private sector staff have seen big cuts in their pensions, then so must the public sector."
He added: "The challenge is to level up private sector pensions, and to build upon the Chancellor's changes to pensions tax relief for those on more than £150,000 to ensure that tax help with pensions goes to those who need it the most, rather than the least."
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