UK Pension Tax Relief Calculator 2025/26

How pension tax relief works

When you contribute to a pension, the government tops up your contribution with tax relief. Basic rate relief (20%) is added automatically — for every £80 you pay in, £100 goes into your pension. If you're a higher rate (40%) or additional rate (45%) taxpayer, you can claim the extra relief through your self-assessment tax return.

Annual Allowance

The Annual Allowance for 2025/26 is £60,000 (or 100% of your earnings if lower). This is the maximum total pension contributions (personal + employer) that benefit from tax relief each year. You can carry forward unused allowance from the previous 3 years.

Tapered Annual Allowance

If your adjusted income exceeds £260,000, your Annual Allowance is reduced by £1 for every £2 over the threshold, down to a minimum of £10,000. This affects high earners and those with significant employer contributions.

Lifetime Allowance abolished

From April 2024, the Lifetime Allowance has been abolished. It has been replaced by the Lump Sum Allowance (£268,275) and the Lump Sum & Death Benefit Allowance (£1,073,100), which cap tax-free lump sum withdrawals rather than total pension pot size.