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Pensions tax relief calculator

Work out how much you could save in tax relief when paying into a pension. This calculator and the examples below use the current income tax rates that apply in the UK. If you are a Scottish taxpayer the tax relief you will be entitled to will be at the Scottish Rate of income tax, which may be different from the rest of the UK in the future.

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Tax treatment depends on individual circumstances and may be subject to change in future. Tax rules can change. For examples of how the tax relief works in practice use the link below. An income tax rate of 45% applies to incomes over £150,000.

View pensions tax relief examples now

1. Non-taxpayer

Angela is full-time carer with no taxable income. Her husband pays £120 into a stakeholder pension each month on her behalf.

Despite not paying tax, Angela is entitled to basic rate tax relief on the payments made by her husband:

Monthly payment £120
Tax relief reclaimed by Stakeholder provider £30 (20% of £150)
Total invested each month into Angela's pension. £150

2. Basic rate taxpayer

Alan earns £20,000 a year and pays a highest tax rate of 20%. He is entitled to basic rate tax relief on his personal pension contribution of £240 a month.

Monthly payment £240
Tax relief reclaimed by personal pension provider £60 (20% of £300)
Total invested each month £300

3. Higher rate taxpayer

Stuart earns £80,000 a year and pays a highest tax rate of 40%. He makes a personal pension contribution of £960 a month.

Monthly payment £960
Tax relief reclaimed by personal pension provider £240 (20% of £1,200)
Total invested each month £1,200
Additional tax relief claimed in Stuart's self-assessment return* £240 (20% of £1,200)

*As Stuart pays higher rate tax on the total amount he contributes, he can claim additional tax relief on that amount. The additional tax relief is the difference between higher rate tax relief and the basic tax relief already reclaimed by his personal pension provider on his behalf.

Total invested for the year £14,400 (£1,200 x 12 months)
Additional tax relief claimed in Stuart's self assessment return £2,880 (20% of £14,400)
Stuart's total tax relief for the year will be ((£240 x 12) + £2,880) = £5,760

4. Marginal rate taxpayer

Lindsay, who lives in England, earns £50,000 a year and pays a highest tax rate of 40%. She makes a personal pension contribution of £720 a month.

Monthly payment £720
Tax relief reclaimed by personal pension provider £180 (20% of £900)
Total invested each month £900

As Lindsay's total yearly pensions contribution (£900.00 x 12 = £10,800) is greater than the amount of her earnings which are subject to higher rate tax, she can only claim additional tax relief on the part of her contribution which is subject to higher rate tax.

The additional relief available to Lindsay is the difference between the two calculations below.

Without a pension contribution

If Lindsay had made no personal pension contributions in the year, her income tax liability would have been calculated as follows:

  • Lindsay would have paid tax on income above her personal allowance of £11,500
  • She would have paid a basic rate tax (20%) on the next £33,500
  • She would have paid a higher rate tax (40%) on any remaining income.
Income above personal allowance = £50,000 - £11,500 = £38,500
Income above basic rate band = £38,500 - £33,500 = £5,000

So Lindsay’s tax bill would have been:

£33,500 x 0.20 £6,700
£5,000 x 0.40 £2,000
Total £8,700

With a pension contribution

Because Lindsay contributes a total of £10,800 to her personal pension in the year, her income tax liability will be calculated as follows:

Her tax bands are the same except that her basic rate band is increased by the total yearly amount invested in her personal pension. So she'll pay basic rate tax on up to £33,500 + £10,800 = £44,300

Income above personal allowance = £50,000 - £11,500 = £38,500

The remainder is less than Lindsay's revised basic rate band, so she'll pay basic rate tax on it all.

So Lindsay’s tax bill will be:

£38,500 x 0.20 £7,700

So Lindsay can claim additional tax relief of £8,700 - £7,700 = £1,000 in her tax return.

So her total tax relief for the year will be (£180 x 12) + £1,000 = £3,160