An increasing number of workers are unaware of the tax incentives for pension savings.
According to construction industry financial services firm B&CE’s annual Spring pensions research more than half (52%) of workers claim that they are not aware of these tax breaks, which is an increase from last year’s 43%.
Younger employees are the most likely to be in the dark over the potential pensions tax savings up for grabs. Some 70% of those aged under 24 years were unaware of these, along with 65% of employees under the age of 34 years. The age group most likely to recognise the tax benefits of saving for a pension were those aged between 45 and 64 years. In terms of workforce demographics, a large proportion of unskilled manual workers (65%) were also unaware of pensions tax advantages, while 68% of adults who do not currently save into a pension said that they were also unaware of these.
Location also played a part in employees’ understanding of the issue. Just under two-thirds (63%) of those that didn’t understand the tax savings on offer lived in the north of England.
Among those that did understand the tax incentives on offer, 57% believed that everyone should receive the same rate of tax relief. Higher-rate tax payers, however, were less in favour of this, with 45% disagreeing with the idea.