Sipps: use your pension tax breaks

It makes sense to exploit your Isa allowance, but don’t neglect your pension. Generous upfront tax relief makes occupational or personal schemes an efficient way to save.

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Squirrel it away in a Sipp
(Image credit: G.K. & Vikki Hart)

At this time of year the focus is always on Isas.But it's also important to take advantage of generous tax reliefs on pensions, some of which operate annually, too. Each tax year, pension savers get a new annual allowance. At present, in most cases, this caps your pension contributions (including any made by your employer and the value of tax relief) at £40,000 or the total value of your earnings, if lower.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.