Overview
- LCP’s analysis of 2023–24 HMRC data indicates about 800,000 eligible higher‑rate savers failed to reclaim, leaving up to £1.46bn unclaimed.
- Only 316,000 higher‑rate taxpayers—around 28% of those entitled—claimed the top‑up, even though roughly 6.8 million people use relief at source.
- Higher‑ and additional‑rate taxpayers receive only the basic 20% in their pension automatically, with the extra 20% or 25% claimed through a tax return.
- HMRC reports average annual reclaims of £1,756 for higher‑rate taxpayers and £2,195 for additional‑rate taxpayers, with the option to claim for up to four previous years.
- The freeze of income tax thresholds until 2031 is set to push more savers into higher bands, and HMRC is urging eligible taxpayers to claim or contact the department.