File now or risk losing out

THERE'S a lot to think about as the end of the tax year looms, and many risk losing out by failing to claim tax relief on their pension contributions.

- 

This matters more than ever as millions are being dragged into higher-rate tax bands by the freeze on income tax thresholds, with experts warning that huge sums of relief could go unclaimed.The deadline for filing a tax return for the 2024/25 tax year is January 31, yet around six million people still haven't submitted theirs.

There's plenty to worry about, but this is one issue anyone paying into a pension really shouldn't ignore.

Pension providers automatically add basic-rate tax relief at 20% to contributions, but higher and additional rate taxpayers must actively claim the extra relief, usually through self-assessment, or risk missing out altogether.

Nearly two million more people are estimated to be paying the 40% higher rate of tax compared with just two years ago, while the number paying the 45% additional rate has risen by around 660,000, according to research from PensionBee.