UK Pension Tax Relief Calculator 2025/26
Calculate UK pension tax relief for basic, higher and additional rate taxpayers. Includes annual allowance check, carry-forward and pension vs ISA comparison for 2025/26.
£
Including salary, self-employment, rental etc. £
Net contribution paid to pension (before relief) £
Added to Annual Allowance check £
Unused AA from previous 3 tax years £0
Total Tax Relief on Contribution
£0
Basic Rate Relief (auto-added)
£0
Higher Rate Relief (via SA)
£0
Effective Cost to You
Pension Contribution Breakdown
How to Use This UK Pension Tax Relief Calculator
Enter your gross annual income and the net pension contribution you plan to make (the amount you actually pay in — HMRC adds basic rate relief on top). Enter any employer contributions to check your Annual Allowance position. The calculator shows total relief and any additional higher/additional rate relief you can claim via Self Assessment.
The Formula
Gross Contribution = Net Contribution ÷ 0.80 (HMRC adds 20% basic rate relief)
Basic Rate Relief = Net Contribution × 25% (grossing up)
Higher Rate Relief = Gross Contribution × (Tax Rate − 20%) for HR/AR taxpayers
Total Relief = Basic + Higher Rate Relief
Effective Cost = Net Contribution − Higher Rate Relief
Annual Allowance Check: Gross Contribution + Employer ≤ £60,000 + Carry-Forward
Basic Rate Relief = Net Contribution × 25% (grossing up)
Higher Rate Relief = Gross Contribution × (Tax Rate − 20%) for HR/AR taxpayers
Total Relief = Basic + Higher Rate Relief
Effective Cost = Net Contribution − Higher Rate Relief
Annual Allowance Check: Gross Contribution + Employer ≤ £60,000 + Carry-Forward
Example
Priya, £65,000 income, pays £10,000 net into SIPP in 2025/26:
Gross contribution (after basic relief): £10,000 ÷ 0.80 = £12,500
Basic rate relief added by HMRC: £2,500
Higher rate portion of income: £65,000 − £50,270 = £14,730
Higher rate relief claim: £12,500 × (40% − 20%) = £2,500
Total relief: £2,500 + £2,500 = £5,000
Effective cost of £12,500 pension contribution: £10,000 − £2,500 = £7,500
Gross contribution (after basic relief): £10,000 ÷ 0.80 = £12,500
Basic rate relief added by HMRC: £2,500
Higher rate portion of income: £65,000 − £50,270 = £14,730
Higher rate relief claim: £12,500 × (40% − 20%) = £2,500
Total relief: £2,500 + £2,500 = £5,000
Effective cost of £12,500 pension contribution: £10,000 − £2,500 = £7,500
Extended
Pension vs ISA Comparison
See which wrapper delivers better lifetime returns at your tax rate
Compare pension and ISA to determine the most tax-efficient wrapper for your retirement savings.
| Scenario | Pension (SIPP) | ISA | Pension Advantage |
|---|
Annual Allowance Reference Table
| Income | Annual Allowance | Max Pension Contribution (net) | Total Relief at 40% |
|---|---|---|---|
| Up to £50,270 (basic rate) | £60,000 | £48,000 (gross £60,000) | N/A — only basic rate relief |
| £50,271–£100,000 (higher rate) | £60,000 | £48,000 (gross £60,000) | Up to £12,000 additional relief |
| £100,001–£125,140 (PA taper zone) | £60,000 | £48,000 | Up to 60% effective relief |
| £125,141–£260,000 (additional rate) | £60,000 | £48,000 | Up to £15,000 additional relief |
| Above £260,000 (tapered AA) | £10,000–£60,000 | Varies | Tapered allowance applies |
Frequently Asked Questions
How does pension tax relief work in the UK?
When you contribute to a UK pension (personal pension, SIPP or workplace scheme), HMRC adds basic rate tax relief automatically — so contributing £80 actually puts £100 into your pension (£80 from you + £20 from HMRC). Higher and additional rate taxpayers can claim the extra relief through Self Assessment: a higher rate payer contributing £80 (grossed up to £100) can claim back an additional £20 (the difference between 40% and 20%), making the effective cost £60.
What is the pension Annual Allowance for 2025/26?
The Annual Allowance is £60,000 for 2025/26 (or 100% of your earned income if lower). This is the total of employer and employee contributions that can attract tax relief in a tax year. If you have not used your full allowance in the previous 3 tax years, you may be able to carry forward the unused allowance and add it to this year's limit. Very high earners (income + contributions above £260,000) have a tapered allowance that can reduce to as low as £10,000.
What is the Money Purchase Annual Allowance (MPAA)?
If you have flexibly accessed your pension (drawn income via flexi-access drawdown or taken an uncrystallised funds pension lump sum), your Annual Allowance for money purchase (defined contribution) pensions is reduced to £10,000. This prevents recycling pension income back into a pension to gain tax relief twice. The MPAA does not apply if you have only taken a tax-free cash lump sum.
When can I take tax-free cash from my pension?
You can take up to 25% of your pension pot tax-free as a pension commencement lump sum (PCLS). The tax-free element is subject to the lump sum allowance of £268,275 (for most people who have not had a higher limit since 2023). The remaining 75% of your pension is taxed as income when withdrawn. You can access your pension from age 55 (rising to 57 in 2028).
Pension vs ISA — which is better?
Both are tax-efficient but in different ways. A pension gives you upfront tax relief on contributions (20%–45% back from HMRC) but is taxed on withdrawal as income. An ISA gives no upfront relief but all withdrawals are completely tax-free, including growth. For most higher-rate taxpayers in working years who expect to be basic rate taxpayers in retirement, a pension wins due to the larger upfront relief. For those who expect similar rates in retirement, or who want more flexibility, an ISA can be better.