Nearly two million more people are estimated to be paying the 40% higher-rate tax this year compared to 2022\/23. Over the same period, the number of additional-rate taxpayers<\/a> has increased by around 660,000. It means a rising number of people are now entitled to higher levels of pension tax relief, but many are failing to claim it.<\/p>\n READ MORE: HMRC sends hundreds of thousands of \u2018brown envelopes\u2019 chasing small sums <\/a><\/p>\n READ MORE: New low for Rachel Reeves as furious pub bosses threaten strike action <\/a><\/p>\n Millions of workers earning \u00a350,000 or more are being warned they could be missing out (Image: Getty)<\/p>\n Research suggests that hundreds of thousands of higher and additional rate taxpayers miss out every year, leaving around \u00a3250million unclaimed.<\/p>\n On top of that, as many as a third of higher-rate taxpayers could be missing out on an additional 20% tax relief.<\/p>\n Gary Smith, financial planning senior partner and retirement specialist at Evelyn Partners<\/a>, said: \u201cPension tax relief is the outstanding benefit of the UK\u2019s private pension saving system, so it would be foolish to pass it up.<\/p>\n \u201cThose who have only recently started paying higher-rate tax might be the most at risk of losing out as many will be unaware of the need to do this.\u201d<\/p>\n He added that individuals who complete annual tax returns may be used to claiming relief, but millions of workers on PAYE are not registered for self-assessment.<\/p>\n Mr Smith continued: \u201cEven those who are, need to make sure they use their tax returns to claw back tax relief they are owed as well as paying what they owe to HMRC<\/a>.\u201d<\/p>\n A simple oversight could cost savers a significant sum (Image: Getty)<\/p>\n Mr Smith warned that a simple oversight could cost savers a significant sum.<\/p>\n He said: \u201cBy not claiming back the tax relief<\/a> they are entitled to on pension contributions already made, higher and additional rate taxpaying savers could be inadvertently sacrificing thousands of pounds – at a time when frozen thresholds and allowances mean that millions of taxpayers in recent years have been drawn into paying a higher rate of tax on their income.\u201d<\/p>\n He added: \u201cThere\u2019s obviously not much point paying into a pension<\/a> to save on income tax<\/a> and then throwing away a big part of the saving.\u201d<\/p>\n Anyone paying into a \u201crelief at source\u201d scheme or a personal pension, such as a SIPP, contributes out of income after tax has been deducted.<\/p>\n Providers then automatically add the basic 20% tax relief. But Mr Smith said higher earners must claim the extra relief themselves.<\/p>\n He explained: \u201cIf you have paid tax on your income at the higher rate of 40% or additional rate of 45%, you will then need to proactively claim back the extra 20% or 25% in relief from HMRC<\/a>.\u201d<\/p>\n<\/p>\n He also said that some workers may be confused by the terminology. \u201cIt might be that some employees are misled by the term \u2018relief at source\u2019 which could be taken as implying that all relief is taken care of at the point of contribution.<\/p>\n \u201cRather, it is in \u2018net pay\u2019 or salary sacrifice systems that relief at all levels is granted automatically.\u201d<\/p>\n Employees unsure of their scheme type should check with HR or their pension provider.<\/p>\n Mr Smith said: \u201cThey can specifically ask their HR people or the pension provider if all their tax relief has been added to their contributions.\u201d<\/p>\n Mr Smith added that all personal pension savers<\/a> should assume they need to act. He explained: \u201cAll personal pension savers meanwhile, whether it is a policy with one of the big insurers, a stakeholder pension or a SIPP, can assume they need to take action to claim back higher or additional rate tax relief.\u201d<\/p>\n New rules from September 1, 2025 also mean HMRC will require stronger evidence for claims.<\/p>\n Some workers may be confused by the terminology (Image: Getty)<\/p>\n Mr Smith said: \u201cYour pension<\/a> provider will have the necessary documents, which are often available online.\u201d<\/p>\n![\"Shocked](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/01\/Shocked-man-looking-at-his-laptop-6660555.jpg\" "\\"Shocked")
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