Quick answer
If you pay higher or additional-rate tax and contribute to a pension using relief at source, you claim the extra 20% or 25% relief through Self Assessment or by contacting HMRC. Basic-rate relief is added automatically by your pension provider.
Updated October 2026 · Figures based on 2026/27 rates
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Relief at source
You pay 80% of the contribution and the provider claims 20% from HMRC. Higher-rate taxpayers claim the remaining relief on their return.
Net pay and salary sacrifice
Employer arrangements usually deduct the contribution before tax, so relief is given automatically at your highest rate.
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Annual allowance
Most people can pay up to £60,000 a year or 100% of earnings with tax relief, with a tapered allowance for very high earners.
Where to enter it
Report personal pension payments in the relevant section of the return so your higher-rate band is extended.
In practice, the best time to review your position is well before the end of the tax year on 5 April, while there is still time to make a contribution that counts for the year and to check the figures with a professional if needed.
How pension tax relief works
When you pay into a personal pension, such as a SIPP, you pay the contribution after basic-rate tax. The pension provider claims 20% back from HMRC and adds it to your pot. So a payment of £8,000 from your bank becomes a gross contribution of £10,000 (£8,000 divided by 0.8). That covers the basic-rate relief automatically. If you pay tax at 40% or 45% you are entitled to more, but it is not given automatically under this method: you claim the extra through your Self Assessment return, or by contacting HMRC if you are not otherwise required to file. HMRC’s guidance on tax relief for private pensions explains both methods in detail.
Workplace schemes can operate differently. With a net pay arrangement, contributions come out of your pay before tax, so you receive full relief at your marginal rate through payroll and generally do not need to claim anything more. Check how your scheme works before assuming an extra claim is due. Scotland has its own income tax bands, so the point at which higher-rate relief starts differs there.
Worked example: claiming higher-rate relief
This is an illustrative example. A higher-rate taxpayer in England pays £8,000 into a personal pension. The provider adds £2,000, making a gross contribution of £10,000. Extra relief is the difference between their marginal rate and the 20% already given:
| Item | Working | Amount |
|---|---|---|
| Paid from your bank | Net contribution | £8,000 |
| Basic-rate relief added by provider | £10,000 x 20% | £2,000 |
| Gross pension contribution | £8,000 + £2,000 | £10,000 |
| Extra relief through the return | £10,000 x 20% (40% – 20%) | £2,000 |
| Net cost after all relief | £10,000 – £2,000 – £2,000 | £6,000 |
So £10,000 goes into the pension at a net cost of £6,000. A 45% taxpayer would claim an extra 25% instead, worth £2,500 on the same contribution, giving a net cost of £5,500.
The effect on the £100,000 income trap
Pension contributions also reduce your adjusted net income, which can matter greatly between £100,000 and £125,140, where the Personal Allowance is withdrawn at £1 for every £2 of income. Imagine adjusted net income of £110,000. The Personal Allowance is cut by £5,000 (half of £10,000), to £7,570. A gross pension contribution of £10,000 brings adjusted net income down to £100,000 and restores the full £12,570 allowance.
| Item | Working | Tax effect |
|---|---|---|
| Tax saved on £10,000 at 40% | £10,000 x 40% | £4,000 |
| Allowance restored | £5,000 x 40% | £2,000 |
| Total saving | £4,000 + £2,000 | £6,000, or 60% of the contribution |
| Net cost of £10,000 pension | £10,000 – £6,000 | £4,000 |
The same approach can help with the High Income Child Benefit Charge, which starts at £60,000 and is fully clawed back at £80,000. Our guide on the £100,000 allowance trap covers this in more depth.
Limits you must stay within
Tax relief is limited to the higher of your relevant UK earnings in the year and £3,600 gross for those with little or no earnings. The annual allowance is £60,000, and unused allowance from the previous three years can be carried forward if you were a member of a registered scheme in those years; see pension carry forward. High earners may face a reduced allowance, explained in our guide to the tapered annual allowance. Going over the limit can create a tax charge, so check the position before making a large payment.
Common mistakes
- Not claiming the extra higher-rate relief on the return at all.
- Claiming it on contributions already given full relief through net pay.
- Using the net figure instead of the gross figure on the return.
- Exceeding the annual allowance or earnings limit.
- Forgetting that contributions help reduce adjusted net income for the £100,000 and child benefit thresholds.
- Confusing employer salary sacrifice with personal contributions, which are treated differently.
Pension relief checklist
- Annual statements showing contributions paid and tax relief added.
- Confirmation of whether your scheme is relief at source or net pay.
- Your earnings for the year and your allowance position.
- Carry forward details for the last three years.
- Your expected adjusted net income.
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This article is general information, not personal tax advice.
Frequently asked questions
Can I claim relief for earlier years?
You may be able to carry forward unused annual allowances from the previous 3 tax years.
Does it reduce my personal allowance taper?
Yes. Pension contributions reduce adjusted net income.
Do I need to file a return to get higher-rate pension relief?
If you do not normally file a Self Assessment return, you can usually ask HMRC to adjust your tax code or make a claim instead. If you already complete a return, you claim the extra relief there.
Can I claim relief for contributions made in earlier years?
Generally yes, within the normal time limit for amending or claiming, which is around four years from the end of the tax year. Check current HMRC guidance for your situation.
Is the annual allowance the same as the amount I can get tax relief on?
No. Relief is limited by your earnings, while the £60,000 annual allowance limits tax-free growth of total contributions in the year. Both limits matter, and carry forward can increase the allowance.
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The Bottom Line
If you pay 40% or 45% tax and contribute to a relief-at-source pension, the extra 20% or 25% relief is yours to claim — but HMRC will not give it automatically. Check whether your scheme is relief at source or net pay, enter the gross contribution on your return, and watch the £60,000 annual allowance and the £100,000–£125,140 taper zone, where a well-timed contribution can be worth 60% in tax relief.
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