Pension tax refunds
Mar 18, 2024
Right, does everyone remember simultaneous equations from school? What a waste of time. Well don’t worry, if you’re like me and still need a calculator to work out the 10% tip on a £100 bill, you’ll still be able to understand the awesomeness of ‘Pension Tax Relief’. 🤓
The money you save into most workplace pensions has already been taxed (pesky income tax!). But the government has a deal which means your pension provider can claim back the money you’ve paid in income tax if it goes straight into your pension. So instead of that money disappearing in a tax bill, it gets put in your pension for future you! 🏝
Here’s the maths part– pension providers will claim back at the basic income tax rate (20%), which actually means that whatever you save into your pension gets a 25% top up. For example, if you save £100 into your pension, the government adds £25. 🤑
There aren’t many places you can put money to get a boost like that. It’s all part of a big government plan to encourage people to save for retirement – and frankly, it’s pretty great.
Winner winner 🐔 🍽