How UK pension tax relief works
In a relief-at-source scheme (such as a SIPP or personal pension), you pay £80 net, and the government adds £20 basic rate tax relief directly into your pension pot, making a £100 gross investment.
If you are a higher rate (40%) taxpayer, you can claim an extra £20 relief back via your Self Assessment tax return, reducing the net cost of a £100 pension contribution to just £60.
Worked example: Higher rate tax relief
A higher rate taxpayer making an £800 net contribution to a SIPP receives £200 in basic rate tax relief added to the pot (£1,000 gross). Through Self Assessment, they claim an additional £200 tax rebate, making the net out-of-pocket cost only £600 for a £1,000 pension investment.
Inputs for the uk pension tax relief calculator
Contribution Amount
Enter your net personal payment or gross workplace deduction.
Tax Band
Select your marginal income tax band (Basic 20%, Higher 40%, Additional 45%, or Scottish rates).
CALCULATOR QUESTIONS
UK pension tax relief calculator questions
How do I claim higher rate tax relief in the UK?
You claim the extra 20% or 25% relief through your annual HMRC Self Assessment tax return or by contacting HMRC to update your PAYE tax code.
What is the annual limit on tax-relieved contributions?
Tax relief is limited to 100% of your UK relevant earnings in that tax year, up to the statutory £60,000 Annual Allowance (unless tapered).