Over 2.3 million savers are failing to claim all eligible taxes on their pensions, according to analysis by InvestEngine.

The data revealed that over half (56 per cent) of workers paying higher or additional rates of tax (earning £50,271 or more) currently pay into a personal pension such as a self-invested personal pension (SIPP) - equivalent to 4.9 million adults.

However, of those with personal pensions, 46 per cent said they don't currently claim pension tax relief on their contributions, meaning 2.3 million higher and additional rate taxpayers are losing out on claiming extra money for their retirement pots.

For someone saving £400 a month into their personal pension over 40 years, failing to claim back tax relief could reduce their pot by £350,000, InvestEngine's analysis showed.

This failure, combined with account fees as small as 1 per cent, could halve the potential of their pension, reducing its value by hundreds of thousands, the firm warned.

In percentage terms, an annual fee of just 1 per cent over 40 years reduces a portfolio's final value by 24 per cent, while a 2 per cent fee reduces it by 41 per cent, regardless of the contribution levels.

The double effect of failing to claim relief and paying a fee - even one as low as 1 per cent - over 40 years could halve a £1.6 million pension pot, reducing it to less than £800,000.

Commenting on the findings, InvestEngine head of investments, Andrew Prosser, said that many savers putting away "good sums" for retirement are still losing out by not claiming eligible tax relief.

"Over time, this could reduce pension pots by hundreds of thousands of pounds. Those paying the higher tax rate and contributing to a personal pension should ensure they are claiming back all eligible tax from HMRC while checking their pension provider's fees to see whether they could be getting a better deal elsewhere."

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