Hundreds of thousands of people could be missing out on their full pension tax relief, according to to a recent survey by a pension provider. The survey found that many higher rate taxpayers are failing to claim back more than the basic rate, effectively handing up to £229 million a year to the Treasury, and severely curtailing their retirement income.
Tax relief explained
All pension contributions qualify for tax relief. In theory this means that all contributions should be tax-free, either by virtue of being paid before income tax and NI contributions in a workplace scheme, or rebated by HMRC. In effect, this means a £100 contribution only costs £80 for a basic rate taxpayer. Continue reading