UK Pension Tax Relief Hits £60 Billion as Higher-Rate Savers Take About £40 Billion
Updated
Updated · The Guardian · Aug 8
UK Pension Tax Relief Hits £60 Billion as Higher-Rate Savers Take About £40 Billion
1 articles · Updated · The Guardian · Aug 8
Summary
£60 billion in UK pension income-tax relief was recorded for 2024-25, up from £48 billion in 2022-23, with about £40 billion going to higher-rate taxpayers.
Higher earners receive 40% tax relief on pension contributions while standard-rate taxpayers get 20%, a gap critics say widens retirement inequality and shifts public subsidy toward wealthier savers.
The report argues Chancellor John Healey should consider equalising pension tax relief before the autumn budget as he searches for money for defence, social care and other spending pressures.
UK retirement patterns sharpen the debate: defined-benefit pensions and longer life expectancy let many affluent workers retire around 60, while lower-wealth workers are less likely to stay employed at 65 mainly because of ill health or weak skills.