Britons are being urged to “keep on an eye” on important tax relief which could boost someone’s pension savings by £720 a year.
Anyone who earns less than £3,600 annually or has no earnings can still pay into a retirement plan and qualify for tax relief.
The maximum amount someone is able to contribute is £2,880 a year, but when tax relief is added this pension scheme saving is raised to £3,600.
This relief is available to people even if they earn less than this figure or have no income coming in at all.
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Britons are looking for ways to boost their retirement savings with tax relief giving people options
It also applies to those who pay into a personal or stakeholder pension scheme themselves and with certain workplace retirement plans.
The way some workplace pension schemes work means that anyone earning less than the personal allowance of £12,500 will not get any tax relief added.
This example of tax relief is being cited by experts as a way to bridge the existing gender pension gap with some suggesting it could be used to bolster a non-earning spouse or partner’s retirement savings.
New research carried out by interactive investor found that women save £57 less on average a month into their pensions pots compared to their male counterparts.
Alice Guy, the head of Pensions and Savings at interactive investor, highlighted the “huge knock-on impact” having children has on the retirement prospects of women.
She explained: “Women are more likely to work part time in their 30s and 40s and that makes it much harder to build pension wealth, and steep childcare fees mean there’s often little money spare for extra pension payments.
“It’s important to keep an eye on your pension wealth, even if you take time out from the workplace.
“If you’re planning to reduce your hours or take time out from the workplace, then it’s worth seeing if you can afford to make more than the minimum pension contributions while you’re still working full time.”
The gender pension gap is resulting in women having less saved for retirement
The pension savings expert urged women to consider the tax relief option if they are a non-earner, depending on the affordability of it.
Ms Guy added: “You’re allowed to pay up to £2,880 into your pension as a non-earner and still receive a tax-relief top up as if you were a taxpayer.”
“The good news is that the gender pension gap slightly reduces once women enter their 50s, suggesting that women often manage to boost their pension payments once they return to full time work.
“Pension saving is a marathon, not a sprint, and it’s possible, although not always easy, to channel more money into your pension once you can afford it.”