29 April 2008
The country's leading pension providers have sent millions of
letters to clients over the past few weeks warning them that they
need to contribute more to their monthly pension schemes as a
result of the change in income tax from 22% to 20%.
An individual saving £200 a month into a pension will now
need to pay an extra £48 a year to get the same pension pot,
as the pension contribution will only receive 20% tax relief at
source and not 22%. This does not affect higher rate tax payers,
where higher rate tax relief remains at 40%.
