Few taking advantage of pension tax relief: Unbiased
Employees could boost their pension pot by up to £602 individually and £2.5bn collectively by taking advantage of tax relief on pension contributions, Unbiased.co.uk has claimed.
A survey by Unbiased found that 4m Brits, who are not paying into a pension but say they are likely to consider doing so, are currently not using £2.5bn of income tax relief on pension contributions.
Karen Barrett, chief executive of Unbiased.co.uk, said: “Saving into a pension can be one of the most tax-efficient methods of saving for retirement.
“However, people rarely think about the tax benefits. Tax relief on pension contributions is free money available to you, helping you to boost your retirement pot.
“The effect of tax relief on pension payments over time can be considerable but being proactive is vital to ensure consumers are making the most of these tax-efficient saving vehicles. This is even more important if you are a higher rate taxpayer where the onus is on you to claim back the additional tax relief owed to you.”
She warned that employees should not wait until auto-enrolment comes in to start saving, but should seek advice from an IFA.
Tim Purdon, managing director of Ayrshire-based Paladin Financial Services, said: “It is very important for people to make adequate retirement planning arrangements.
“However, due to the financial situation and all the uncertainties about volatile markets and restricted income, it is difficult for younger people to set money aside for retirement.”