Missing pensions relief

1 in 3 higher-rate taxpayers missing out on pension tax relief

Analysis by Interactive Investor suggests that a third of higher-rate taxpayers could be missing out on additional tax relief on their pension contributions by not completing a self-assessment tax return. A poll by the investment platform shows that 32.5% of respondents either do not intend to claim or do not know how claim the additional 20% pension tax relief. Interactive Investor says a higher rate taxpayer paying £5,000 a year into a private pension could potentially miss out on £1,250 each year as a result, while someone paying in £10,000 a year could miss out on £2,500 in pension tax relief. Alice Guy, head of pensions and savings at Interactive Investor, says that pension tax relief is the “jewel in the crown of the UK pension system,” but warned that many higher rate taxpayers are missing out on the full tax benefit. This, she said, “could have a huge knock-on impact on their retirement wealth.”