This might sound counter-intuitive but it can be a valuable financial planning tactic in certain circumstances.

There is a general misconception that retirement planning means paying money into a pension. A pension is simply a tax-advantaged investment wrapper. Indeed, for tax efficiency and flexibility, it is often best to hold a mixture of pensions, ISAs, cash and other investments at retirement.

Pension contributions attract tax-relief at your marginal rate but are then taxed when you draw benefits. For higher rate taxpayers, a £60 net pension contribution will be ‘grossed up’ to £100 with the benefit of 40% tax relief. For higher rate taxpayers this actually means an immediate 66% enhancement on your investment.

For those who do not pay higher rate tax, there is an advantage in making any additional savings into an ISA. Like a pension, the money can be invested into equities which, over the longer term should outperform cash and fixed interest assets, but at retirement, the fund can be converted to fixed interest and any income would be tax-free.

If you are a basic rate taxpayer now but feel that you are likely to become a higher rate taxpayer in the relatively near future, why not consider delaying contributions until you can obtain higher rate tax relief.