With income tax having dropped from 22% to 20% many of us will have found our pay packets a little fuller this April.
But what does that mean for your pension? As the government can't give you back more tax than you paid in the first place, the knock on effect is that the tax relief added to your pension has also fallen by 2% to 20%. There's been no change to the higher rate tax rate so those of you on 40% tax still get 20% relief in their pension and can claim back the 20% difference.
So now, to keep your contributions at the same level, you have to pay £80 to get a gross pension contribution of £100 instead of paying £78.
That's why many advisers are recommending you use some of that extra cash from the tax cut to bump up your pension payments. That way your pension stays on track and you won't notice any difference.
