UK: Pension top-up for 1.2m low earners
Around 1.2m low earners currently missing out on tax top-ups on their pension contributions are to receive payments from the government under measures outlined in the Budget.
Currently, individuals who don’t earn enough to pay tax, including hundreds of thousands of female part-time workers, are denied a government top-up on their pension contributions if they are enrolled in a “net pay” pension plan by their employer.
In contrast, a similar low-earning saver enrolled in a “relief at source” pension arrangement can receive a 20 per cent government top-up on what they pay into their pensions.
On Wednesday the Treasury announced it would take steps to resolve the “net pay” anomaly by introducing a system to make top-up payments directly to low-earning individuals saving in these schemes from 2024-25 onwards.
Reed More @Financial Times
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