IFAP says working people in company pension schemes are also missing out on huge sums by neglecting to save in tax-efficient ways. High-rate taxpayers that are covered for their retirement by a company pension scheme will gift an unnecessary extra £656 million to the tax man this year by failing to make Additional Voluntary Contributions.
IFAP chief executive David Elms says: “Under-provision for retirement remains a crucial problem for the UK and those that are in a position to save more should be doing so. However, it seems that people are compounding the situation – be it through apathy or confusion – by failing to claim vital sources of retirement income in the form of tax credits. Likewise, retirement savers are not making things any easier for themselves by overlooking the need to top-up their company pension pot.
He continued: “No one likes paying more tax than is necessary, and no one likes missing out on something that is rightfully their own, so we are urging people to either kick-start their pension and tax planning or review their current situation with urgency. A discussion with a local IFA is a great place to start this process.”
Elms says customsers can visit IFAP’s website www.taketaxaction.co.uk which contains tips on how to save tax, an online tax wastage calculator, and a guide to saving tax.