Originally Posted by
downsizer
What does this mean for me? In simple Ingerlundish please?
I think it’s to do with tax relief on personal pensions.
Say you earn £55k a year, but want to invest in a personal pension plan, then if you were to pay £5k into such a plan you would get £1k paid into your plan by the government, and you woul get a further £1k back when you file your tax return. You get 40% on that £5 back. It’s a nice way of keeping yourself in the lower tax band, for now.
It’s a good kickback if you can afford it, but you won’t see the 20% that goes into your plan until you start drawing it.