Pension Tax Relief Calculator 2026/27
A pension contribution gets topped up by tax relief at your highest rate. Enter your contribution and income to see the relief, the real cost to you and the boost to your pot.
Last updated 4 July 2026 · Written and reviewed by Mustafa Bilgic
Pension tax relief calculator
Relief and true cost of a pension contribution, 2026/27.
Estimate for England, Wales & NI. Higher-rate relief is claimed via Self Assessment — see GOV.UK.
How pension tax relief works
When you pay into a pension, the government effectively refunds the income tax you paid on that money — that's pension tax relief. Relief is given at your highest (marginal) rate: 20% for basic-rate taxpayers, 40% for higher-rate and 45% for additional-rate. It's the single biggest reason a pension beats an ordinary savings account for long-term money — every £1,000 you contribute can cost a higher-rate taxpayer just £600.
A higher-rate taxpayer on £60,000 paying £10,000 into a pension gets roughly £3,900 of tax relief — so the true cost of a £10,000 pension boost is about £6,100. Basic-rate relief (£2,000) is usually added automatically; the rest is claimed back.
The two ways relief is given
Under relief at source (most personal pensions and SIPPs), you pay from taxed income and the provider adds 20% automatically — so £800 becomes £1,000 in the pot. Higher and additional-rate taxpayers then claim the extra 20% or 25% through Self Assessment or by contacting HMRC. Under a net pay arrangement (many workplace schemes), the contribution comes out before tax, so full relief is given straight away and there's nothing to claim. Either way the total relief is the same; this calculator shows that total based on the tax you'd save.
Higher-rate relief you have to claim
The catch is that higher and additional-rate relief on relief-at-source pensions isn't automatic. Millions of higher earners never claim the extra 20%, quietly leaving money with HMRC. You can usually claim for the current year and up to four previous tax years, so a missed claim isn't always lost. If you're a company director balancing salary and dividends, our dividend tax calculator and self-employed tax calculator help you see which income the relief offsets.
The 60% band sweet spot
Between £100,000 and £125,140, your personal allowance is withdrawn, creating an effective 60% marginal rate. A pension contribution in this band gets relief at that 60% effective rate — the most valuable relief available — because it both saves 40% tax and restores the personal allowance you were losing. Our take-home pay calculator shows where your income sits against these thresholds.
The £60,000 annual allowance
There's a limit on relievable contributions: the annual allowance is £60,000 for 2026/27 (or 100% of your earnings if lower). You can carry forward unused allowance from the previous three tax years if you were a pension member then. Very high earners face a tapered allowance, falling as low as £10,000 once adjusted income exceeds £260,000, and anyone who has flexibly accessed a pension is limited by the £10,000 Money Purchase Annual Allowance. Contributions above your allowance can trigger a tax charge, so check the limits on GOV.UK before making a large one-off payment.
Frequently asked questions
How much tax relief do I get on pension contributions?
Relief is given at your highest rate of income tax: 20% for basic-rate taxpayers, 40% for higher-rate and 45% for additional-rate. So a £10,000 contribution saves a higher-rate taxpayer around £4,000 in tax, meaning the real cost is about £6,000.
Do I have to claim higher-rate pension tax relief?
For relief-at-source pensions like most SIPPs and personal pensions, the basic 20% is added automatically but the extra 20% or 25% for higher and additional-rate taxpayers must be claimed through Self Assessment or by contacting HMRC. You can usually backdate a claim up to four tax years.
What is the pension annual allowance for 2026/27?
The annual allowance is £60,000, or 100% of your earnings if that's lower. You can carry forward unused allowance from the previous three years. High earners may have a tapered allowance as low as £10,000, and the Money Purchase Annual Allowance is £10,000 for those who've flexibly accessed a pension.
Why is pension relief in the £100k–£125k band so valuable?
In that band your personal allowance is withdrawn, giving an effective 60% marginal tax rate. A pension contribution there gets relief at that 60% rate because it saves 40% tax and restores the personal allowance you were losing — the best-value relief available.
Is pension tax relief different in Scotland?
The mechanism is the same but the rates follow Scottish income tax bands, so relief is given at Scottish rates (which include intermediate, higher, advanced and top rates). This calculator uses England, Wales and Northern Ireland rates.