All change for retirement tax reliefs

Don’t miss the deadline

Pension investors are being urged to ignore current stock market uncertainty and take advantage of generous tax reliefs on retirement savings schemes before April 5. The cut in the basic rate of income tax from 22 to 20 per cent this spring means that upfront tax breaks on pension contributions will also be cut back in many cases even for higher−rate taxpayers.

Currently, a £1,000 pension investment is automatically topped up by £282 to reflect basic rate tax relief, with higher rate taxpayers able to claim an additional £231 relief. From 6 April, the reduction in standard−rate income tax means basic upfront relief on a £1,000 pension investment is also restricted to £250, while higher−rate taxpayers are able to claim a further £250.

Levels and bases of, and reliefs from, taxation are subject to change.

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