Pension tax relief is the government’s way of encouraging you to save for retirement. Essentially, some of the money that would have gone to the government as tax goes into your pension pot instead for the 2026/27 tax year.
The Annual Allowance
There is a limit to how much you can contribute tax-free. The Annual Allowance is currently £60,000 per tax year. Calculate your pension growth and tax savings using our Pension Growth Calculator.
Frequently Asked Questions (FAQ)
Q: How do I claim higher rate pension tax relief?
A: While basic rate relief is added automatically, higher and additional rate taxpayers must claim their extra 20% or 25% tax relief via a Self Assessment return.
Q: What is the pension annual allowance?
A: The maximum amount you can contribute to your pension tax-free in a single year is £60,000, capped at 100% of your relevant UK earnings.
Q: Can I carry forward unused pension allowance?
A: Yes, you can “carry forward” unused pension allowances from the previous three tax years to make larger tax-free contributions in the current year.