Tax on your private pension contributions

Tax relief

You can get tax relief on private pension contributions worth up to 100% of your annual earnings.

You get the tax relief automatically if your:

  • employer takes workplace pension contributions out of your pay before deducting Income Tax
  • rate of Income Tax is 20% - your pension provider will claim it as tax relief and add it to your pension pot (‘relief at source’)

If your rate of Income Tax in Scotland is 19% your pension provider will claim tax relief for you at a rate of 20%. You don’t need to pay the difference.

You get relief at source in all personal and stakeholder pensions, and some workplace pensions.

UK tax relief is also available on contributions made to certain types of overseas pension schemes.

It’s up to you to make sure you’re not getting tax relief on pension contributions worth more than 100% of your annual earnings. HM Revenue and Customs (HMRC) can ask you to pay back anything over this limit.

When you have to claim tax relief

You may be able to claim tax relief on pension contributions if:

  • you pay Income Tax at a rate above 20% and your pension provider claims the first 20% for you (relief at source)
  • your pension scheme isn’t set up for automatic tax relief
  • someone else pays into your pension

Claim tax relief in England, Wales or Northern Ireland

You can claim tax relief on your Self Assessment tax return for:

  • 20% if you pay Income Tax at 40%
  • 25% if you pay Income Tax at 45%

You can also call or write to HMRC to claim if you pay Income Tax at 40%.

Claim tax relief in Scotland

You can claim tax relief on your Self Assessment tax return for:

  • 20% if you pay Income Tax at 21% - you’ll get the remaining 1% through your pay
  • 21% if you pay Income Tax at 41%
  • 26% if you pay Income Tax at 46%

You can also call or write to HMRC to claim if you pay Income Tax at 21 or 40%.

If your pension scheme isn’t set up for automatic tax relief

Claim tax relief in your Self Assessment tax return if your pension scheme isn’t set up for automatic tax relief.

Call or write to HMRC if you don’t fill in a tax return.

You can’t claim tax relief if your pension provider isn’t registered with HMRC.

If someone else pays into your pension

When someone else (for example your partner) pays into your pension, you automatically get tax relief at 20% if your pension provider claims it for you (relief at source).

If you’re in a workplace pension that allows other people to contribute you may need to claim the tax relief on those contributions - call or write to HMRC.

If you don’t pay Income Tax

You still automatically get tax relief at 20% on the first £2,880 you pay into a pension each tax year (6 April to 5 April) if both of the following apply to you:

  • you don’t pay Income Tax, for example because you’re on a low income
  • your pension provider claims tax relief for you at a rate of 20% (relief at source)

Life insurance policies

You can’t get tax relief if you use your pension contributions to pay a personal term assurance policy, unless it’s a protected policy.

Personal term assurance is a life insurance policy that either:

  • ends when the first insured person dies
  • insures people who are all from the same family