The insurer calculates that 250,000 high earners in workplace private pensions are missing out on 20 per cent of the value of their pension contributions by not claiming the relief.
Standard says poor member communication following the removal of the obligation for high earners to fill in a tax return could be the reason why so many are missing out. Employees are entitled to claim back six years’ worth of benefit by contacting their local tax office.
Unlike members of group personal pensions or group stakeholders, members of occupational DC schemes receive their full 40 per cent tax relief automatically.
John Lawson, head of pensions policy policy at Standard Life said “Of the 3.2 million working higher rate taxpayers, I estimate that as many as quarter of a million are failing to claim higher rate tax relief on their pensions. This probably stems from the removal of the requirement to fill in a self-assessment return for most employed higher rate taxpayers.”