You CAN still get free money for a pension… but you need to act fast before Labour ends this generous scheme

The plan to boost your pension savings is so absurdly generous that I would suspect it was a scam if it wasn’t offered by the government. If you put £80 into your pension, the government will contribute £20 for free, if you’re a basic rate taxpayer.

If you are a higher rate taxpayer, you only need to put in £60 and the government will give you £40. For additional rate taxpayers, you need to put in £55 and the government will give them £45.

As with all good deals, I don’t think this one will last forever.

That’s why three weeks ago – just hours before Rachel Reeves made her first major speech to parliament as Chancellor of the Exchequer – I slipped out of the office to call my pension provider and ask if I could add a small amount to my nest egg. I wanted to do that in case they made the tax relief for pensions less generous.

Reeves had indicated that “tough decisions” had to be made – a stark warning that tax rises or benefit cuts were on the horizon.

In the end, it was the pensioners who suffered the blow: the winter allowance was abolished for everyone except those who received pension credit.

I didn’t think it was likely that she would reform the pension tax cut in that speech. It’s a huge change that should surely only be implemented after consultation and in an official budget statement.

But stranger things have happened: she wouldn’t be the first finance minister to surprise the financial sector with a huge, unexpected pension reform.

And as is often the case when I see a bargain, I didn’t want to miss out by reacting too late.

Now more and more pension experts expect Reeves to reconsider the pension tax cut in her October 30 budget.

Suspicions are mounting, partly because Labour has not denied that this is its plan. And partly because many agree that the current arrangement is almost too good to be true.

Of course, it could also be that she doesn’t tinker with it at all, because that is not so easy and can have serious consequences, especially for government programs.

Chancellors have considered it in the past – and then stepped down because it wasn’t worth the effort. If Reeves goes ahead, the most likely outcome will be a flat rate of pension tax relief. If she sets the flat rate higher than 20 per cent, basic rate taxpayers will get an even more generous deal than they currently enjoy.

But a flat rate would almost certainly make higher-rate or higher-rate taxpayers worse off.

If you are a higher or additional rate taxpayer and you have money that you can afford to lose until you draw your pension, it may be worth joining me and adding a lump sum to your pension too.

Of course, it needs to be thought through carefully. Building up a lump sum is not an easy task for most of us.

There are also limits to how much you can pay into your pension each year. Check with your provider or an advisor to see if it is wise for you to pay more into your pension.

You should also be sure that you are happy with a lump sum pension payment now, even if the Chancellor of the Exchequer leaves the current system unchanged – which she may well do. There is always the chance that you will need the money sooner and wish you had not stashed it away.

But I counted how many years it would be until the earliest I would have access to the money (at age 58, which in my case is still 18 years away). Then I counted back 18 years to remember what was happening in my life then (at age 22).

And let me tell you, 18 years ago feels like yesterday. I hope that, by the same (very unmathematical) logic, when the next 18 years pass in the blink of an eye, I will thank myself for increasing my pension now.

My pension provider has automatically added a 20 percent tax benefit to my pension. Kerching.

The remaining 20 percent I have to squeeze out of HMRC. You can do this by completing a tax return or contacting HMRC and asking them to hand over the tax relief.

This is the bit I’m not looking forward to. Last year, a staggering 56,000 HMRC callers were cut off after being left on hold for more than an hour, a report revealed last week. What a disgraceful performance.

I dread to think how many tax savings people have missed out on because they didn’t realise they had to apply to HMRC to get it, or gave up waiting for the phone to ring to get it. The old adage ‘if it’s too good to be true, it probably is’ is overwhelmingly true in the world of personal finance.

But it falls apart when it comes to the current pension tax system. Enjoy it while you can…

For my wedding in a few weeks, I asked people how they manage their household finances with their partner. So far, no two models are the same. Some don’t merge their finances at all, others put everything in one pot and split it. What works for you? I’d love to hear your advice.

Cruel rules prevent cancer patients from going on holiday

It’s only when I’m on holiday that I remember what it feels like to be truly relaxed. I get so used to the aches and pains of everyday life – caused by sitting still at a desk for hours, overheating on the London Underground or the adrenaline of deadlines at work – that I don’t notice them anymore.

Holidays are essential for a reset. So I was furious when I read a study from Queen’s University Belfast that found cancer patients are being cruelly denied travel insurance and other services – or forced to pay significantly higher premiums, making holidays unaffordably expensive.

People who are now cancer-free are forced to go on vacation often when they need it most. Or they take a big risk and travel without insurance. This is because they have to report their previous cancer diagnosis to insurers.

Have you been in this situation? Please contact us. rachel.rickard@mailonsunday.co.uk