Parents taking time off to look after their children could boost their pension pot by £720 a year by utilising a little known rule, experts have said.

A long-standing rule allows partners or relatives to pay up to £2,880 a year into the pension of someone who is not earning while looking after children.

HMRC automatically tops up that contribution by 25 per cent, handing families an additional £720 for the future.

How does the top-up work?

Pension contributions automatically receive tax relief at the 20 per cent basic rate, which means for every £80 contributed, the Government adds £20, resulting in a total contribution of £100 – a 25 per cent boost on the amount paid in.

Every tax year, you can usually get tax relief on pension contributions up to 100 per cent of your earnings or £60

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