Time limit for claiming higher rate tax relief on pensions being cut from April 2010

Many people saving through personal pensions, including employer facilitated GPPs and Group Stakeholders, are only getting half of the tax relief they are due.

These schemes automatically give individuals basic rate tax relief, but it is up to the individual to re-claim higher rate relief if they are eligible. However, for the many people who don't complete a self-assessment this requires action on their part. Some people miss out through apathy, or because they don't know the onus falls on them. The good news is that if someone discovers they could have claimed this relief in previous years they can make a backdated claim for the money due to them. However, the Government is reducing the time limit for making these claims from nearly 6 years to 4 years from 6 April 2010.

Andrew Tully, Senior Pensions Policy Manager at Standard Life, said: 'It's no secret that higher rate tax relief is an exceptionally valuable benefit but, despite that, many people are not aware they need to ask for this extra relief. Claiming your tax is straightforward as you simply have to write to your local tax office. But the clock is ticking, so taking action now could save you money. Given the current financial climate, a cheque from the Revenue will come as a welcome bonus.'