Not Using Pensions to Save Tax

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Not Using Pensions to Save Tax

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Posted on: 04/09/2014

Tax relief on pension contributions is one of those rare occasions when the taxman gives you something back.

In 2012-2013 it cost the government nearly £35 billion.

This is because, under current rules, when you pay money into a pension, the government effectively pays 20% of the total contribution (subject to maximum limits).

If you are a higher tax payer then the government could in effect contribute 40% or even 45% in total.

But it should always be remembered that the value of any relief will depend on your individual circumstances and also, tax rules can change.

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