The majority of working age people with pensions do not understand the tax relief that they receive on their contributions.

A YouGov online survey conducted for The People’s Pension found that 15% of the respondents had never even heard of tax relief.   This statistic was proven by half of those with a workplace pension who said they’d be more likely to increase the amount they saved if they received a form of tax relief on their contributions.  This response was given despite the fact that most of these people were already receiving tax relief.

Director of policy and market engagement at The People’s Pension said that this research really highlights the fact that tax relief is barely understood.

Human resource experts were quite surprised by the results of this survey, due to the fact that there has been widespread publicity about pensions following the introduction of the freedom and choice reforms in April.  This publicity also directly followed the launch of the Chancellor’s consultation into tax relief at the Budget in June this year.

The survey also found that there was strong support for a system where the Government matched savers’ contributions.  Additionally, if this were to actually happen, over half of the surveyed said they would be more likely to increase the amount they saved.

As smaller businesses begin to stage for auto-enrolment, millions of people could possibly be introduced to the idea of a pension for the first time.  HR experts believe it is more important now than ever that people understand what a pension is, what comes with it and how to maximize their savings.