Scottish Widows: Pensions tax relief can result in big savings

07 September 2007
Investors are missing out on large saving opportunities through tax relief from their personal pensions, a study has claimed.

According to research from Scottish Widows, 40 per cent of UK residents considering financial investments are unaware of the potential savings, while three-quarters of potential UK investors are not receiving tax relief from a personal pension.

The study claimed that savings of £100 a month into a personal pension could add £27,000 to an investor's retirement fund.

Some 40 per cent of UK taxpayers are unaware of the benefits available from Her Majesty's Revenue and Customs (HMRC), which gives basic rate taxpayers 22p and higher rate taxpayers 40p for every pound they save in a pension, the research added.

Scottish Widows head of pensions market development Ian Naismith commented that any opportunities to boost savings for a person's retirement should be "welcomed with open arms".

"The UK as a whole is seriously undersaving for retirement and our calculations shows that typical saver's retirement pot is significantly boosted by the money they could get back from Her Majesty's Revenue and Customs," he added.

EveryInvestor has recently argued that restrictions imposed by pension funds are deterring savers, noting that the reduced costs involved in individual savings accounts render them "significantly more attractive".

Find out more about personal pensions

track© Adfero Ltd