Workers boosted pension contributions by 60% a month to use new tax incentives | Personal Finance | Finance

Pension savers increased their average quarterly contributions by 63 percent in the final three months of the tax year ending in April, according to a new analysis.

The figures confirm a continuing gender divide with contributions by men far outstripping those of women.

The average monthly contribution by men rose by 64 percent, climbing from £1,242 to £2,038, while the figure for women was up 60 percent, rising from £,121 to £1,822.

Self-employed savers also gave their pensions a boost with their average quarterly contribution amount rising by 63 percent from £1,121 in Q4 2023, to £1,822 in Q1 2024.

The figures come from leading online pension provider PensionBee who said the increases could be attributed to savers maximising available tax relief.

This is because the annual maximum that people can pay into their pension – and claim tax relief – rose from £40,000 to £60,000 in the 2023/24 tax year.

PensionBee director of public affairs, Becky O’Connor, said: “It’s encouraging to see consumers increasing their pension contributions and taking advantage of the tax benefits associated with this.

“Despite the prolonged cost of living pressures, the rise in the annual allowance threshold appears to have motivated pension savers to prioritise their pension contributions.”

Despite the differences between male and female pension contributions, both genders are aiming to maximise available tax relief.

Miss O’Connor continued: “As we look ahead to the election, the potential reinstatement of the Lifetime Allowance by Labour, if elected, could reshape the limitations of the annual allowance and tax penalties.

“Regardless of any change in government, the annual allowance must remain generous enough to incentivise consistent pension contributions, as this will enhance consumers’ quality of life at retirement.”

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