UK pension savers will miss out on £742 million this year

Employees in company pension schemes are set to miss out on whopping sums this year by neglecting to save in a tax-efficient manner, according to new research from unbiased.co.uk, the professional advice website. Higher rate taxpayers who are members of their employers' occupational pension scheme will miss out on an extra £742 million* in tax relief this year by failing to make Additional Voluntary Contributions (AVCs).

AVCs run alongside employers' pension schemes and allow employees to pay extra into their pension which should result in a larger pension pot at retirement.  AVCs benefit from the same tax relief as contributions paid into the main pension scheme, so it makes sense to benefit from this tax-efficient way of saving for retirement.  

Check out how much you could be savings by being tax efficient with unbiased.co.uk's tax waste calculator.

Karen Barrett, Chief Executive of unbiased.co.uk comments: "Failing to save for retirement has become an increasing problem for the UK population. The financial meltdown experienced over the last two years further compounded this problem, as the value of people's pension funds has decreased.  And furthermore people have put off saving for retirement as their day to day money worries have taken priority. 

"A discussion with an IFA is a good way to ensure you are planning effectively for your retirement and get your financial affairs in order.  Consumers should take action now and can carry out a free and confidential search on unbiased.co.uk's ‘find an IFA' service to find an independent financial adviser who can offer invaluable advice on the best way to save for retirement." 

* TaxAction 2010 report produced for IFA Promotion by RAKM, based on a specially commissioned analysis of HMRC and a range of other official data sources.