2. Tax relief

You can get tax relief on private pension contributions worth up to 100% of your annual earnings. This means either you don’t pay Income Tax on contributions to your private pension or you get tax back.

You don’t usually have to claim tax relief on pension contributions - you get it automatically if either:

  • you’re in a workplace pension and your employer takes contributions out of your pay before deducting Income Tax
  • your pension provider claims tax relief for you at a rate of 20% and adds it to your pension savings - this is called ‘relief at source’

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

It’s up to you to make sure you don’t get tax relief on pension contributions worth more than 100% of your annual earnings - HM Revenue and Customs (HMRC) can ask you to pay back any tax relief above 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

If you pay 40% Income Tax

Claim tax relief on the extra 20% in your Self Assessment tax return if you pay Income Tax at the 40% rate. If you don’t fill in a tax return, call or write to HMRC.

If you pay 45% Income Tax

You can only claim tax relief on the extra 25% in your Self Assessment tax return if you pay Income Tax at the 45% rate.

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

You automatically get tax relief at 20% when someone else pays into your pension (eg your partner) 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, eg because you’re on a low income
  • your pension provider claims tax relief for you at a rate of 20% (relief at source)