Nine in 10 Brits in dark about key pension perk | Personal Finance | Finance

Nearly nine in 10 Brits are in the dark about one of the most generous perks in personal finance – pension tax relief. New research from PensionBee suggests 88% don’t know the rate they receive, which is concerning, when we’re just under two weeks away from the April 5 tax-year deadline.

This is a striking blind spot, with only 12% of working-age adults able to correctly identify their own rate of tax relief, while 75% admit they don’t really understand it at all. Even more surprising was that nearly 31% of people didn’t realise pensions come with tax relief in the first place. If you’re in the seeming minority that is clued up on relief, please stick with me, because you may be in another group that unknowingly needs to claim more of it.

In a nutshell, pension tax relief means the Government tops up contributions made to your pot. For most savers, every £100 invested costs a basic-rate taxpayer £80, as 20% tax relief is applied. Higher-rate taxpayers pay £60 for the same investment, with 40% tax relief applied, while additional-rate taxpayers pay just £55, with a 45% relief applied. Pensions are one of the few places where your money gets an instant, guaranteed boost.

That’s why they remain one of the fastest ways to build long-term wealth. As long as you keep within the annual allowance – which is typically the lower of £60,000 or 100% of your earnings – contributions benefit from relief at your highest marginal tax rate.

However, not everyone gets the full relief automatically. If you’re paying into a personal pension using the “relief at source” system, only basic-rate relief is added upfront. Higher and additional rate taxpayers must claim the extra relief via HMRC, either through self-assessment or its online service.

Many people don’t know this step is required, which has led to billions of pounds in unclaimed relief over the years. A Freedom of Information request from LCP partner Steve Webb estimated that around £1.4billion in pension tax relief went unclaimed in the 2023/24 tax year.

However, it should be noted that for most higher earners in workplace schemes, no extra claim is usually necessary.

There are other little-known boosts, too, such as carry-forward rules. These let you use unused allowances from the previous three tax years – potentially allowing contributions above £60,000 – provided you had a pension in place and don’t exceed current annual earnings. When the new tax-year starts on April 6, 2026, any unused allowance from the 2022/23 tax year will expire forever, which could cost you thousands in lost tax efficiency.

Pensions aren’t just about saving cash; they’re about maximising free money, and with the tax deadline approaching, grasping the rules and utilising allowances could make a meaningful difference to your retirement pot.

The Co-op is offering a steal of a deal for those hosting an Easter Sunday roast. Members of its loyalty scheme can get a whole British chicken, baby potatoes, carrots and Yorkshire puddings for £5 (or £5.98 for non-members).

The bargain is available until April 14 through Co-op’s same-day delivery online platform, shop.coop.co.uk. Just use the code ROASTDEAL at checkout.

Nearly six million households need to submit an energy meter reading by the end of the month to avoid overpaying in April. If you’re on a standard variable tariff, this applies to you.

When the energy price cap drops on April 1, comparison site Uswitch.com estimates average monthly usage to drop to £97, down from £166 in March. The drop is mainly due to the Government removing certain levies from domestic bills and lower usage as temperatures rise.

However, without a smart meter or timely meter reading, some of your April usage may be charged at the more expensive March rates. To avoid this, submit a meter reading on or before Wednesday, April 1.

You can call your provider to give them your gas and/or electricity meter readings, or enter the figures into your online account. Citizens Advice can explain how to read a meter if you’re stuck. You can reach them on 0808 223 1133. Energy providers also offer step-by-step guides on their respective websites. If you can’t reach your meter, your energy supplier might be able to help you read or move it. Call them to find out what options you have.