Quote:
Originally Posted by pilotbob
What do you mean? Most retirement funds are tax free in the US too.
Harry didn't really man that the UK contributes to the fund.... although it did sound like he was saying that, I'm sure that's not what he meant.
BOb
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I meant exactly what I said, Bob
. When you pay money into a private pension fund here in the UK, the fund claims back from the inland revenue (the tax department of the government) tax equivalent to the maximum rate of income tax that person pays, and adds it to the fund. That means that for a higher-rate tax payer, if you pay £1000 into the pension fund yourself, the fund claims another £400 from the government, and you end up with £1400 in your fund.