Members of pension schemes who don’t pay Income Tax – usually those earning less than £12,500 per year – are permitted to basic rate tax relief (20 percent) on pension contributions up to £2,880 a year.
In practice, this means that HM Revenue and Customs (HMRC) will top up a net contribution of £2,880 to a gross £3,600.
However, this tax relief is only available where the pension scheme operates on a relief at source basis – known as RAS.
It’s not available for schemes that operate a net pay arrangement.
Adrian Boulding, Director of Policy, NOW: Pensions said: “It’s becoming extremely visible that women are being hit harder this pandemic when it comes to their finances and will continue to be disproportionately impacted as the economic crisis unravels.