Cash-strapped Brits could be missing out on hundreds of pounds in their retirement funds as a helpful hack continues to slip under the radar, a financial firm claims.
It turns out that many private and workplace pensions let family and friends of the account holder pay into the fund - so you could build up extra cash for your retirement, pension, and savings.
If your family or friends pay into your pension account - the account holder is eligible for tax relief based on their circumstances, not the person paying in.
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It means that you could be entitled to hundreds of pounds in tax relief on top of the money paid in - and HMRC can even advise you on how to do this, reports The Mirror.
Path Financial said it’s this benefit that many people don’t realise, and it could boost the funds they receive when they retire.
Rowan Harding, financial planner at Path Financial, said: “There are lots of people who are just beginning their career, for example, who do not make huge contributions to their pension pot who may benefit from having someone pay into their retirement plan for them.
“They can then claim tax relief on those contributions based on their own circumstances, meaning they could get even more money added to their pot.
"What we need to do is get the word out that if you are putting money into someone else's pension, they can get additional tax relief from your contribution, which they would not receive by just taking into account their workplace or own personal contributions.”
Path Financial wants those who don’t earn enough to know you can still pay in up to £2,880 in contributions towards a pension and are able to claim tax relief on it. The scheme means people can receive up to £720 extra per year.
HMRC said: “When someone else (for example your partner) pays into your pension, you automatically get tax relief at 20 percent if your pension provider claims it for you (relief at source).
“If you’re in a workplace pension that allows other people to contribute you may need to claim the tax relief on those contributions - call or write to HMRC.”
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