Pension Tax Relief Calculator

Calculate how much tax relief you could get on your pension contributions with our handy tool.

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information shouldn't be regarded as financial or tax advice and we can't be held responsible for any errors. Please speak to a financial adviser or accountant as needed.

What is pension tax relief?

When you save into a pension, the government usually tops up your personal contributions as a reward for saving towards your retirement. It does this in the form of pension tax relief. The amount you get is equivalent to the rate of income tax you pay;

  • Basic rate taxpayers get a 25% tax top up
  • Higher rate taxpayers can claim a further 25% tax top up
  • Additional rate taxpayers can claim a further 31% tax top up.

It's worth noting that basic rate pension tax relief is automatically added on eligible contributions with PensionBee, however higher and additional rate taxpayers will need to claim further relief via Self-Assessment. Fortunately, this is easy to do - read more in our ultimate guide to pensions and tax.

For example, a basic rate taxpayer who contributes £1,000 into their pension pot, will usually receive £250 as a tax top up from the government, boosting their total personal pension contribution to £1,250.

A higher-rate tax payer who contributes £1,000 into their pension pot, will still usually receive £250 as a tax top up from the government, but they’ll also be able to claim an additional £250 through their next Self-Assessment tax return. You can call or write to HMRC to claim it if you don’t fill in a Self-Assessment tax return. This example is relevant to tax rates in England, Wales and Northern Ireland. For Scotland there are different applicable rates which you can read more about on the HMRC website.

Are there any restrictions?

  • You must be a UK taxpayer and under the age of 75
  • You can't benefit from pension tax relief on contributions from your employer to your workplace pension
  • The limit on tax relievable pension contributions for 2023/24 is £60,000 or 100% of your salary (whichever is lower)
  • Any pension contributions that exceed the allowance are subject to an annual allowance charge in line with income tax
  • Under the right circumstances you may have the option to carry forward any unused allowances from the previous three years, on top of your current year’s annual allowance.

Find out more about pension tax relief.

Pension tax relief calculator FAQs

Am I eligible for tax relief on my contributions?

To be eligible for tax relief, you must be under the age of 75 and classed as a ‘relevant UK individual’.

To be a relevant UK individual, you’ll need to be in at least one of the following categories:

  • You are/were a UK resident for tax purposes at some point during the current tax year
  • You are/were a UK resident for tax purposes at some point during the last five tax years, and when signing up to PensionBee
  • You have a spouse/civil partner with general earnings from overseas Crown employment, subject to UK tax
  • You have ‘relevant UK earnings’*, subject to income tax

*Relevant UK earnings are normally your total taxable earnings from UK-based work. This includes earnings from employment, self-employment and bonuses. It generally doesn’t include any investment income.

You are generally unable to claim tax-relief on contributions above your relevant earnings. If you earn less than £3,600 annually or don’t earn anything, the maximum amount you can contribute to your pension whilst receiving tax-relief is £2,880 net, bringing your total annual contribution to £3,600 gross once tax relief is added.

What’s the difference between a tax top up and tax relief?

If you’re a registered tax payer, you won’t have to pay tax on your pension contributions (up to a limit). This is known as tax relief.

The amount of tax relief you receive is dependent on the amount of income tax you pay. For most people, it’s 20%.

This means that for every £100 you contribute to your pension, £20 of that is claimed back as tax relief. In effect, you only have to pay in £80 for every £100 that lands in your pension.

Here’s another way to think of it... for every £80 you personally contribute to your pension, the government tops it up by £20. In effect, you receive a 25% tax top up.

So whether you view it as 20% tax relief or a 25% tax top up, the result is the same.

Can I drawdown part of my 25% tax free cash now, and some at a later date?

Yes, for customers over the age of 55 (expected to rise to 57 in 2028), PensionBee offers the ability to be completely flexible with your drawdown. It is important to consider the pension “recycling rules” if you intend on making pension contributions following a withdrawal. Pension recycling is where an individual reinvests either their tax free cash or pension income back into a pension scheme and may be subject to tax penalties.

Can I claim tax relief if I’m not based in the UK?

Yes, as long as you’re still classified as a ‘relevant UK individual’*.

To be a relevant UK individual, you’ll need to be in at least one of the following categories:

  • You are/were a UK resident for tax purposes at some point during the current tax year
  • You are/were a UK resident for tax purposes at some point during the last five tax years, and when signing up to PensionBee
  • You have a spouse/civil partner with general earnings from overseas Crown employment, subject to UK tax
  • You have ‘relevant UK earnings’**, subject to income tax

*If you’re not classified as a relevant UK individual, you won’t be able to claim tax relief.

**Relevant UK earnings are normally your total taxable earnings from UK-based work. This includes earnings from employment, self-employment and bonuses. It generally doesn’t include any investment income.

How do I claim back higher or additional rate tax relief?

Higher and additional rate taxpayers can claim a further 25% and 31% respectively through their Self-Assessment tax returns. This is relevant to tax rates in England, Wales and Northern Ireland. For Scotland there are different applicable rates which you can read more about on the HMRC website. It may be necessary to register for Self-Assessment first if you’ve never filled out a tax return before. Once registered, you can submit returns for the previous tax year from 6 April each year. For example, from 6 April 2024, you’ll be able to file a tax return for your earnings from 6 April 2023 to 5 April 2024. The deadline to submit a return online is 31 January the following year. You can call or write to HMRC to claim it if you don’t fill in a Self-Assessment tax return.

Take control of your pension today

Combine your old and lost pension pots into one new online plan. It takes just 5 minutes to sign up.

Get started

Mobile PensionBee analytics chart
Mobile PensionBee analytics chart
Apple Store logo Google Store logo

How did PensionBee customers find combining their pensions?

PensionBee customer Zahid

It's a very personalised service. It makes me feel like a VIP!

Zahid (38)

PensionBee customer since 2021

PensionBee customer Hannah

I have a regular payment set up each month which makes it really easy to contribute to my pension.

Hannah (31)

PensionBee customer since 2020

PensionBee customer Tony

The process of actually taking money out is so, so simple. I took 25% out of the fund when I got to 55.

Tony (58)

PensionBee customer since 2016

PensionBee customer Afiya

I found signing up to PensionBee incredibly easy. I signed up in a matter of minutes.

Afiya (32)

PensionBee customer since 2018

PensionBee customer Zahid

It's a very personalised service. It makes me feel like a VIP!

Zahid (38)

PensionBee customer since 2021

PensionBee customer Hannah

I have a regular payment set up each month which makes it really easy to contribute to my pension.

Hannah (31)

PensionBee customer since 2020

PensionBee customer Tony

The process of actually taking money out is so, so simple. I took 25% out of the fund when I got to 55.

Tony (58)

PensionBee customer since 2016

PensionBee customer Afiya

I found signing up to PensionBee incredibly easy. I signed up in a matter of minutes.

Afiya (32)

PensionBee customer since 2018