In April 2022, HMRC released a report from research institute, Ipsos MORI, exploring individuals’ awareness and understanding of pensions tax relief, as well as their attitudes towards it.
The report was due to be released in July 2016, but this did not happen due to the extended pre-election period following the EU referendum. It has now been released following a Freedom of Information request and made available publicly.
The report found that only 41% of adults held the correct belief that the Government tops up pension contributions via tax relief and that, of those 41%, both basic rate taxpayers and higher or additional rate taxpayers believed that the Government provides a lower top-up than it does in reality.
Due to this lack of awareness, the report says, people were willing to consider an alternative system, even when it would not change the amount they saved.