Retirement savers missing out on tax relief - Pensions - News - Moneyfacts

News

Retirement savers missing out on tax relief

Retirement savers missing out on tax relief

Category: Pensions

Updated: 04/05/2010
First Published: 04/05/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Britons saving for retirement will miss out to the tune of almost three quarters of a billion pounds in tax relief this year by not making additional pension contributions.

Employees in company pension schemes will be the ones to collectively miss out on some £742 million in tax relief by neglecting to save in a tax-efficient manner, according to unbiased.co.uk.

This is because higher rate tax payers that are part of a company pension scheme are allowed to make Additional Voluntary Contributions (AVCs).

These run alongside private schemes, allowing workers to pay into their pensions, resulting in a larger pot at retirement.

AVCs benefit from the same tax relief as contributions paid into a main pension scheme, meaning many employees are in the position to benefit from this tax-efficient method of saving.

However, it appears that many Britons are neglecting their opportunity to do so.

"Failing to save for retirement has become an increasing problem for the UK population," commented Karen Barrett, chief executive of the website.

"The financial meltdown experienced over the last two years further compounded this problem, as the value of people's pension funds has decreased."

Meanwhile, all three major political parties have been criticised for failing to address the concerns of older voters during the general election campaign.

The National Pensioners Convention (NPC) said there was a huge gap between the demands of older people and the politicians' commitment to tackling hardship, poor care services and fuel poverty.

"For real political power, Britain's 11 million older voters have got to be prepared to back those candidates that support substantially higher state pensions, free care and an end to fuel poverty," said Dot Gibson, NPC general secretary.

Find the best pension for you - Compare pensions.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savers more worried about looks than pension

When you think of getting older, what’s the first thing that comes to mind? For many, it’ll be fears about their looks – but they should really be concerned about their financial situation.

Pension funds defy uncertainty with strong returns

Economic uncertainty has been a persistent theme in recent months, but happily, not every area has been negatively impacted. Indeed, our latest figures show that the pension sector has bucked the trend and posted unexpectedly strong returns.

Do you know what a pension is?

Pensions are something we all need to get our heads round, and we’re continually told that it’s important to start saving into one from as early as possible. Yet new research suggests that this advice could be falling on deaf ears.
 
Close