Higher-rate taxpayers could be missing out on additional pension wealth worth around £97,000 by not claiming additional tax relief via self-assessment tax returns, according to calculations by Interactive Investor.

Interactive Investor’s calculations assume an initial £10,000 contribution, increased annually by 2 per cent, in a pension returning 5 per cent a year over 20 years.

It noted that while 20 per cent tax relief is automatically applied to pension contributions, higher-rate taxpayers can claim an additional 20 per cent on their contributions through a self-assessment tax returns.

Furthermore, additional-rate taxpayers can claim an additional 25 per cent, bringing their total tax relief to 45 per cent.

Interactive Investor highlighted that a higher-rate taxpayer paying £10,000 into a private pension in a single tax year would miss out on £2,500 by failing to claim their full pension tax relief.

Over 10 years, this would result in £34,158 in lost pension wealth, rising to £97,278 over 20 years, assuming the additional tax relief is reinvested in a pension achieving 5 per cent annual growth and contributions are increased by 2 per cent a year.

“Not claiming the additional pension tax relief is a significant financial own goal - one that could have a lasting impact on your quality of life in retirement,” stated Interactive Investor senior personal finance analyst, Myron Jobson.

“Claiming the additional tax relief available to higher-rate taxpayers through a self-assessment tax return can supercharge your pension savings over the long term. By reinvesting this extra relief back into your pension, you not only bolster your retirement pot but also harness the power of compounding growth.

“Each additional contribution benefits from tax-efficient growth over the years, potentially leading to a significantly larger pension fund by the time you retire. It’s a smart strategy to maximise the advantages of both tax relief and long-term investment returns, ensuring your money works as hard as you do.

“Understandably, many people don’t realise there are extra steps required to claim the full 40 per cent tax relief. If you don’t normally complete a tax return, you can still write to HMRC with details of any private pension contributions you’ve made during the year to claim the additional tax relief.

“For higher-rate taxpayers contributing to a relief-at-source workplace pension scheme, it’s important to note that the extra tax relief isn’t applied automatically - you’ll need to claim it yourself.

“Additionally, you can claim back any missing tax relief not only for the current tax year but also for the previous three tax years, ensuring you don’t miss out on what you’re entitled to.”

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