Those paying a higher rate of tax are missing out on pension tax relief due to 10% of them not paying into a pension. According to the research from Prudential, this means £225 million is not being claim a year.
Prudential also found that the average wage for a higher rate taxpayer comes in at £63,000 a year, unsurprisingly way above the national average. The survey found that respondents who make personal contributions to a company’s pension scheme put forward on average £523 a month with them getting back a bit over £200 in tax relief.
Clare Moffa of Prudential said: ““Saving into a pension offers valuable tax relief to all workers and particularly to higher rate taxpayers. With a lower threshold for higher rate tax more people stand to benefit from extra tax relief on pension contributions. However, our research shows that a significant number of higher rate taxpayers are passing up the opportunity to receive an extra helping hand with their future retirement income.
“A career spent earning a relatively high income doesn’t guarantee a comfortable retirement. It’s easy to see how pension contributions can be overlooked. But the good news is that it is never too late to take action and to start saving as much as possible.The changes to pensions and how people can take their retirement income announced in the Budget in March will provide savers and retirees with more choices — making it even more important to take advice from a financial adviser or a retirement specialist.”
Phtot by 401(k) 2012