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Pension contributions are provided with tax relief so long as they are no more than 100 percent of the persons earning in a tax year. The tax relief offered by the government comes in the
form of a type of bonus which is added to the pot. However, if a person has unused allowances from previous tax years they may be able increase how much relief they can get. Some people,
especially at the moment, may not be able to contribute to a pension at all as they’re not working. Pension contributions are usually deducted straight from earnings but in recent months
coronavirus has rendered many people unemployed. This will make pension commitments difficult but the government will still provide a certain amount of relief in these circumstances. If a
person does not have any earnings, they can still get tax relief on any contributions made to a pension up to £2,880. They will get the relief on this relatively small amount so long as they
don’t pay income tax (either due to being on a low income or out of work altogether) and the pension provider claims tax relief for them at a rate of 20 percent. There are various other
things which can impact pension tax relief rules which can make it a tricky asset to fully understand. Currently, people who are 75 or older can contribute to a pension scheme but their
contributions will not qualify for tax relief. There are also different rules for people who are not a UK resident or who are paying into a qualifying overseas pension. Because of all these
different rules, many people seek out professional advice for their pension affairs but this can prove costly. It should be noted that in order for any pension contribution to receive
relief, the scheme itself must be registered with HMRC. It’s possible that pension schemes themselves can have their registration application rejected but this can be appealed. If a pension
scheme is not correctly registered, it can face a penalty of up to £3,000 for every falsehood or inaccuracy reported.