Rising wages are aimed at increasing pension tax relief #
According to the data published by HM Revenue and Customs, the rising wages might upscale the tax relief of pension contributions in the 2023 tax year.
The costs of pension tax relief has risen to £27 billion as wages in the current financial year. The root of pension tax relief growth is found to be in Auto-Enrolment and wage growth.
Becky O’Connor, director of public affairs at PensionBee, thinks that the government evaluation of pension tax relief as a benefit that people mostly don’t know about can be an indicator of a system being “on the slab for changes”.
She thinks that this could be a great encouragement for people to save more into a pension and that tax relief can offer a significant boost to workplace contributions, as, according to O’Connor, “the Automatic Enrolment minimum, at 8 per cent, is not as high as it should be”.