Tax relief is one of the best features of using a pension to save for retirement.
When you pay into your pension, some of the money that would have gone to the Government as tax goes instead into your pension pot, which can help reduce the amount of tax you pay and boost your savings.
How does Tax relief on pensions work?
There are two ways you can get tax relief on your pension contributions:
If you’re in a workplace pension scheme, your employer chooses which method you use; if you’re in a personal pension, you always have to use the relief at source method.
The easiest way to check which method your scheme uses is to ask your HR department (or whoever handles payroll for your employer) or, if you’re self-employed, your pension provider.
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Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.