Who else is topping up your retirement savings?
Aegon Workplace Team
Money may not grow on trees, but it can grow in pots - pension pots, that is. When you pay into your workplace pension, you could find yourself with two helping hands adding to your savings.
Let’s take a look at an example
Kate earns £30,000 a year. She pays 5% (including tax relief) into her pension. So, Kate puts in £100 a month, and this is topped up by another £25 of tax relief from HM Revenue and Customs (HMRC). Her employer also pays 3% which is £75. That means the total going into Kate’s pension pot each month is £200.
How much tax relief you get depends on your salary. For a standard rate taxpayer, tax relief is 20%. For higher earners tax relief is 40% and 45%. Higher rate taxpayers can claim additional tax relief from HMRC through their tax return. The information shown is relevant to standard UK tax payers. Different rates of tax may apply to Scottish and Welsh tax payers. The value of any tax relief depends on your individual circumstances. This information is based on our understanding of current taxation law and HMRC practice, which may change. The value of investments can fall as well as rise, and isn’t guaranteed. The value of your pension pot when you take benefits may be less than has been paid in.