UK Pension Tax Relief Calculator

The government tops up pension contributions at your marginal rate. Basic-rate taxpayers get 20% automatically — pay in £80 and £100 lands in your pension. Higher-rate (40%) and additional-rate (45%) taxpayers claim the extra 20% or 25% through Self Assessment or by asking HMRC to adjust their tax code. Scotland has its own bands (20/21/42/45/48%).

Relief at source (personal/SIPP pensions): the provider adds 20% and you reclaim the rest via Self Assessment. Net pay (many workplace schemes): contributions come out before tax, so you get full relief immediately through payroll. Salary sacrifice: you swap salary for an employer contribution and save National Insurance as well as income tax — the most tax-efficient route.

The Annual Allowance (AA) is the most you can put in across all pensions each year with tax relief — £60,000 for 2024/25, 2025/26 and 2026/27, or 100% of your earnings if lower. It includes employer contributions. Pay in more and an Annual Allowance Charge claws back the relief at your marginal rate.

Yes. You can carry forward unused AA from the previous three tax years, provided you were a pension scheme member in those years and have used the current year's allowance first. This can allow a contribution well above £60,000 in a single year — useful after a bonus or business profit spike.

High earners get a reduced AA. The taper bites when threshold income exceeds £200,000 and adjusted income exceeds £260,000. For every £2 of adjusted income above £260,000 the AA falls by £1, down to a minimum of £10,000 once adjusted income reaches £360,000.

Once you flexibly access a defined-contribution pension (for example, taking taxable income via drawdown), your allowance for future DC contributions drops to the MPAA of £10,000 a year, and you lose the ability to carry forward for those contributions. Taking only your 25% tax-free lump sum does not trigger it.

Between £100,000 and £125,140 your Personal Allowance is withdrawn at £1 for every £2, creating a ~60% effective tax rate. A pension contribution reduces your adjusted net income, reclaiming the lost Personal Allowance — so the effective relief on contributions in that band is around 60%.

If your pension uses relief at source, only 20% is added automatically. Claim the remaining 20% (higher rate) or 25% (additional rate) through your Self Assessment return, or by contacting HMRC to adjust your tax code. Many people never claim this and miss out — it is not automatic for personal pensions.

Normally up to 25% of the pension value as a tax-free lump sum, subject to the lump sum allowance. The rest is taxed as income when drawn. This calculator focuses on relief going in; the tax-free cash applies when you take benefits.