UK pension savers are losing out on tax relief worth approximately £720 million by neglecting to make additional pension contributions.
Employees that are part of their company's pension scheme are missing out on significant amounts of money because they are not saving in tax efficient ways, according to Unbiased.co.uk.
Employees on high tax rates who are members of the company's occupational pension scheme will miss out on these massive sums by failing to make additional voluntary contributions (AVCs).
AVCs run alongside company pension schemes and allow extra funds to be paid into a pension, with the aim being to build up a larger pot for retirement. They are subject to the same tax relief rules as company pension schemes and considered to be a tax efficient way of saving for retirement.
"Failing to save for retirement has become an increasing problem for the UK population," said David Elms, chief executive of Unbiased.co.uk.
"The onset of the credit crunch has further compounded this problem as the value of people's pension funds is decreasing and they are also finding their money doesn't go as far as it used to."
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