Millions of higher-rate taxpayers risk missing pension tax relief, says Penfold

Penfold 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.”