The government adds 25% of any contributions you make to your pension pot, up to the value of your total annual earnings. So, if you pay in £10,000 for example, the government will add £2,500. One of the big advantages of a Wealthsimple personal pension is that we will add this amount to any regular contribution you make straight away out of our funds so you get to benefit from having the money invested in your pension pot as soon as possible.
If you pay 40% or 45% income tax, you may be able to claim back even more from the government by completing your annual tax return. For basic rate tax payers, the 20% tax relief is given “at source”, which means the government boost your contribution into the scheme immediately.
For higher (40%) or additional (45%), the excess tax relief must be obtained by submitting a tax return with HMRC, and recording your contribution on the form. The excess tax relief will then be paid by way of a tax rebate into your bank account by cheque or bank transfer! There is nothing sweeter than the taxman paying you back! Tax returns must be completed electronically by January 31st of the following tax year.