Marvin OnumonuPenfold has warned millions could miss out on pension tax relief before the 31st January Self-Assessment deadline.
The pension provider said higher-rate taxpayers risk losing out on hundreds or even thousands of pounds each year if they do not claim the extra relief.
Chris Eastwood (pictured), CEO at Penfold, said: “We regularly see people paying higher-rate tax who assume all their pension tax relief is handled automatically.
“In many cases, it isn’t, and the result is money being left on the table that HMRC won’t pay back unless it’s claimed.”
Penfold found savers earning above the basic rate threshold and paying into a personal pension or a workplace scheme using relief at source are most likely to miss out.
The research showed many do not realise only 20% tax relief is added automatically.
Eastwood added: “For someone paying 40% income tax, a £10,000 pension contribution could cost as little as £6,000 once all tax relief is claimed.
“If you don’t claim the extra relief you’re entitled to, you simply pay more tax than you need to.”
Penfold said those who already complete Self-Assessment can claim through their tax return, while others may use HMRC’s online service.
Employees in salary sacrifice or net pay schemes typically receive full relief automatically.
He said: “The key is understanding how your pension scheme works. If you don’t know whether your pension uses relief at source, it’s worth checking, especially before the January deadline.
“While the Self-Assessment deadline does not require people to make new pension contributions, January is an important moment to review contributions made during the tax year and ensure any higher-rate relief is correctly claimed.
“Claiming pension tax relief isn’t about gaming the system. It’s about making sure people receive the tax benefit Parliament intended – and not paying more tax than they need to.”
