Last updated: 14 October 2026
Will you get 40% tax relief on your pension contribution?
Yes, if you’re a higher-rate taxpayer and the contribution falls within your higher-rate income. How you get it depends on the type of scheme. With a personal pension or SIPP, the provider adds 20% basic-rate relief automatically, and you claim the extra 20% through Self Assessment or by asking HMRC to adjust your tax code. With a workplace scheme using “net pay”, you get full relief automatically, because contributions are taken before tax.
How relief is given
| Scheme type | How relief works | Do you need to claim? |
| Net pay (most workplace schemes) | Deducted from pay before tax | No |
| Relief at source (personal pensions, SIPPs, some workplace schemes) | Provider adds 20%; higher-rate relief claimed separately | Yes, for the extra 20% or 25% |
| Salary sacrifice | Salary reduced, so no tax or NIC on that amount | No |
How much higher-rate relief you get
Relief at 40% is only given on contributions matching income taxed at 40%. If your income is £55,000 in 2026/27, only £4,730 of it is taxed at 40%. A gross contribution of £10,000 gets 40% relief on £4,730 and 20% relief on the rest.
Example
Claire earns £70,000 and pays £8,000 into her SIPP. The provider adds £2,000 basic-rate relief, so £10,000 goes into her pension. She claims extra relief of £2,000 (20% of £10,000) through her tax return, as all of the gross amount falls within her higher-rate income. So her £10,000 pension contribution costs her £6,000.
Limits
- You get relief on contributions up to 100% of your earnings, or £3,600 gross if you have no earnings
- The annual allowance is £60,000, tapered for incomes over £260,000
- Unused allowance from the last 3 years can be carried forward if you were in a pension scheme
Claiming relief
- Self Assessment: enter gross contributions in the pension section
- Not in Self Assessment: write to HMRC or use your personal tax account, and HMRC adjusts your tax code
- Backdating: you can claim for the last 4 tax years
Income between £100,000 and £125,140
Pension contributions reduce adjusted net income, restoring the Personal Allowance. This gives effective relief of 60% on contributions in this band.
Salary sacrifice changes
From April 2029, NIC savings on salary sacrifice pension contributions will be capped at £2,000 a year per employee. Income tax relief isn’t affected.
Common mistakes
- Assuming the provider’s 20% top-up is all the relief available
- Entering the net amount paid rather than the gross contribution on the tax return
- Claiming extra relief on contributions to a net pay scheme, which already gives full relief
- Paying in more than your earnings and expecting relief on the excess
Keep the annual statements from your pension provider showing the gross contributions, as HMRC may ask for evidence of larger claims.
Frequently asked questions
Does my employer’s contribution get tax relief?
It’s not taxed on you and is deductible for the employer.
Is relief automatic in a net pay scheme?
Yes.
Can I claim relief if I’m a Scottish taxpayer?
Yes, at Scottish rates.
What if I’ve missed claims in earlier years?
You can claim back up to 4 years.
Related: late claims for higher-rate pension relief, pension contributions to cut higher-rate tax and a lump sum pension contribution before retirement.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with higher rate pension relief. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
