Tax deadline nears on back-payments

Time is running out if you want to take advantage of a generous tax relief by making back-payments into your pension fund.

At the end of next month the opportunity to pay unused pension allowance for the previous five years will disappear.

The system, known as carry-forward, allows people with personal pension schemes to catch up with any missed contributions and claim tax relief.

Tax experts say anyone who has seen their income grow significantly since 1994-1995 and now pays tax at the higher rate should consider boosting their pension fund. Pension payments will de press their income liable for tax payable at the higher rate.

Cash in bank and building society savings and current accounts would be more profitably spent buying a larger pension, the experts say.

The amount that you can back-pay into your fund depends on your age and salary. There are four brackets:

17.5% of your annual salary if you are under 25

20% for those aged 25-34

22% for those aged 35-45

Over-55s can pay 40%.