There's less than a week to go but it's still not too late to secure tax relief of up to 40% this tax year by contributing to a pension such as our SIPP (Self Invested Personal Pension). But you must make your application by this Saturday (5th April)!
In recent months the stock market has been volatile, moving both down as well as up. If you want to secure your allowance but don't want to make an investment decision in today's uncertain economic climate you can still contribute to a SIPP but hold the money in cash at a fixed rate of 6% gross p.a. (6.09% AER ) for three months and decide where to invest later. Interest within your SIPP accumulates tax free.
Find out more about the Vantage High Interest Cash Option
Most people will still be eligible for the generous tax relief which means that if you want to contribute £7,800 the government will top this up by £2,200 (the equivalent of basic rate tax) to make a total contribution of £10,000. If you are a higher rate taxpayer you can claim back up to a further 18% of the total contribution on your tax return. In this example - up to £1,800. £10,000 in your SIPP could therefore effectively cost you as little as £6,000 after tax relief. Your total tax relief will depend on your individual circumstances. Tax rules can be changed by the government.
Nearly everyone under age 75 is eligible to contribute to a pension. Even non-earners can put in up to £3,600 gross and gain tax relief of £792 - although if they don't use this year's allowance by contributing no later than 5th April then it will be lost forever.
The deadline is particularly significant for higher rate taxpayers as it is their last chance to reduce their tax bill for this year by claiming against higher rate tax they have paid or are due to pay in this year.
It is important, too, for basic rate and non taxpayers who can claim 22% tax relief on their SIPP investments this year - a sum that will drop to 20% from 6th April.
