Pension tax relief knowledge gap

HMRC has released unpublished research revealing many misunderstandings around pension tax relief, including workplace contributions and government top-ups. How well do you understand the pension tax relief available to you?

How well is the tax relief on pensions understood? Research suggests not well at all, potentially undermining saving motivations.

Of late, HMRC has been publishing past research that had previously been kept under wraps. One interesting document to emerge details research commissioned in 2015 by Ipsos – the opinion polling company – into the understanding of pension tax relief. Ipsos interviewed over 700 adults and found:

There are regularly suggestions leading up to Budgets that pensions tax relief will be cut back because of its multi-billion pound cost to the Treasury. One day, a Chancellor may decide to do just that because the impact of his action will not be understood either… As the song says, you don’t know what you’ve lost ‘til it’s gone.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
Past performance is not a reliable indicator of future performance.
Tax treatment varies according to individual circumstances and is subject to change.
The Financial Conduct Authority does not regulate tax advice.