Pension tax relief rises by £3.1bn in 2020
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According to new HMRC data, a record of £41.3 billion was paid into pensions through tax relief last year, up from £38.2bn in 2019.
Almost two-thirds of the relief in the last tax year is on contributions made by employers into occupational and personal pensions for their staff.
The remaining third was paid into public sector pensions, despite only 6.6 million people being employed by the state in 2019 out of a total UK workforce of 30.9 million.
A significant portion of the increase will have been caused by the rise in mandatory contributions under the automatic enrolment scheme, which requires employers to offer and contribute to pensions for their workers.
The minimum contribution increased from 2% in 2017-18 to 8% in 2019-20.
Nevertheless, pension saving among the self-employed remains low and is declining. The tax relief accounts for less than 1% of the total cost, The Times reports.
The figures released by HMRC also reveal the amount of tax collected from pension payments rose from £18.3bn to £19.2bn over the past two years.
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