More than a million of the lowest-paid workers in the UK will receive a financial boost from 2025.<\/p>\n
New Government legislation just published confirms that around 1.2 million low earners who save for their pension through a Net Pay Arrangement (NPA) will get the same level of government top-up as those who use Relief at Source schemes.<\/p>\n
For NPAs, pension contributions are deducted before income tax is calculated, whereas with Relief at Source it is after.<\/p>\n
Take home pay boosted<\/strong><\/p>\n Around 200,000 workers will receive a £100 increase in their take-home pay. The average beneficiary will receive an extra £53 a year, with 75% of affected workers being women.<\/p>\n The number of people eligible for a top-up of £100 or more is based on the total number of people in the UK who contribute at least £500 every year into their NPA pension but have no tax relief on that contribution.<\/p>\n Financial Secretary to the Treasury Lucy Frazer said: “A quirk in our pensions tax system has meant that over a million low-earners have lost out on government top-ups to their pensions, resulting in comparatively less take home pay.<\/p>\n “We are correcting this injustice so low earners will get the same level of Government support, no matter what type of pension they use.<\/p>\n Since 2015, people saving through an NPA have had less take home pay compared to similar-earning savers who use a Relief at Source scheme. Those using the latter type of pension scheme receive a 20% top-up from the Government on their savings, while those using NPAs receive tax relief at their marginal rate – 0%.<\/p>\n Professional advice<\/strong><\/p>\n The Government has published legislation confirming that it has rectified this anomaly, and low-earning pension savers will receive similar top-ups regardless of what pension scheme they are using. Beneficiaries will receive their top-ups directly into their bank accounts from 2025 and HMRC will be notifying those who are eligible then.<\/p>\n There are several different types of pension contributions. If you would like pension advice, we would recommend seeking professional guidance.<\/p>\n","protected":false},"excerpt":{"rendered":" More than a million of the lowest-paid workers in the UK will receive a financial boost from 2025. New Government legislation just published confirms that around 1.2 million low earners who save for their pension through a Net Pay Arrangement (NPA) will get the same level of government top-up as those who use Relief at […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1219","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-left-layout","blog-style-postblock","","blog-alt-odd"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=1219"}],"version-history":[{"count":0,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1219\/revisions"}],"wp:attachment":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=1219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=1219"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=1219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}