Is everyone allowed the tax benefits?

The Inland Revenue gives you an incentive to save money for retirement, by not taxing you if you put your money into a pension

This works as follows: basically if you have already been taxed on the money you're putting into a private pension - ie your salary - the taxman will put the same amount tax you paid on that money back into your pension plan.

In principle anyone qualifies for this tax relief on a ANY personal pension or occupational pension plan if they have earnings from employment in the UK.

Tax benefits for Occupational Pensions

The Inland Revenue limits your own payments / contributions to 15% of any income a year, (up to a "cap" of £91,800 a year i.e. the maximum you can put in is 15% of £91,800 a year) and limits the eventual pension to two thirds of your final salary

Personal pensions however allow you to contribute more of your earnings than occupational schemes. For example up to the age of 35 you can invest up to 17.5% of your income see contribution limits for personal pensions.

However nothing's that simple and you'd need to check your exact personal circumstances with your IFA or employer's pension dept. if necessary.

Pension Basics Contents