The UK's workforce has been reminded that they are missing out on significant tax benefits if they choose not to save money into a pension.
According to research from unbiased.co.uk, as many as four million people in employment across the UK are currently considering whether to pay some of their wages into a pension scheme.
The benefits of doing so go beyond the money that you save yourself though, with the government also contributing to your pot through tax relief on these savings at 20 per cent for basic rate payers.
That means that for standard rate payers, you only need to contribute £80 of your own money for every £100 you want to save in a pension. This is a significant amount, especially when it is estimated that the average person contributes £3,010 into their pension pot each year.
Based on figures from HM Revenue and Customs, this works out at £602 per person each year, or £2.5 billion collectively for the four million people currently on the fence about whether to start a pension.
Karen Barrett, chief executive of unbiased.co.uk, said: "The effect of tax relief on pension payments over time can be considerable but proactivity is vital to ensure consumers are making the most of these tax-efficient saving vehicles.
"This is even more important if you are a higher rate taxpayer where the onus is on you to claim back the additional tax relief owed to you."
© 2012 Adfero Ltd. All rights reserved. Any views and opinions expressed in news articles are not those of Just Retirement Limited. News supplied by Adfero DirectNews.
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