Hargreaves Lansdown

SIPP tax benefits

Pensions, such as a SIPP, are one of the most tax-efficient ways of saving for retirement. Pension contributions receive up to 45% tax relief. How much will depend on your circumstances.

How you could turn £8,000 into £10,000

SIPP benefits - Basic rate of tax payer illustration

If you invest £8,000 (net) in a SIPP, the government automatically adds £2,000 (20%) basic rate tax relief increasing your total contribution to £10,000 (gross).

Remember, tax rules can change over time and the relief you receive will depend upon your circumstances.

Download our Guide to Pension Tax Relief


How you could turn £6,000 into £10,000

SIPP benefits - Higher rate of tax payer illustration

If you invest £8,000 (net) in a SIPP, the government automatically adds £2,000 (20%) basic rate tax relief. You can claim back up to a further £2,000 (20%) higher rate tax relief via your tax return. £10,000 (gross) in a SIPP could therefore cost you as little as £6,000.

You can do what you like with the higher rate tax you get back. Some clients reinvest it in their SIPP and receive another round of tax relief.

You must pay sufficient tax at the higher rate to claim the full higher rate tax relief via your tax return. Remember, tax rules can change over time and the relief you receive will depend upon your circumstances.

You could get up to 60% tax relief if you earn more than £100,000

Download our Guide to Claiming Higher Rate Tax Relief

Download our Guide to Pension Tax Relief


How you could turn £5,500 into £10,000

SIPP benefits - Additional rate of tax payer illustration

If you invest £8,000 (net) in a SIPP, the government automatically adds £2,000 (20%) basic rate tax relief. You can claim back up to a further £2,500 (25%) higher and additional rate tax relief via your tax return. £10,000 (gross) in a SIPP could therefore cost you as little as £5,500.

You can do what you like with the higher/additional rate tax you get back. Some clients reinvest it in their SIPP and receive another round of tax relief.

You must pay sufficient tax at the higher/additional rate to claim the full tax relief via your tax return. Remember, tax rules can change over time and the relief you receive will depend upon your circumstances.

Download our Guide to Claiming Higher Rate Tax Relief

Download our Guide to Pension Tax Relief


You don't need earnings to receive tax relief

SIPP benefits - Non tax payer rate illustration

If you have no earnings (for example, the retired, non-working spouses or children) you can still contribute up to £3,600 gross each tax year to a pension and receive 20% tax relief.

If you contribute the full £3,600, the government will automatically pay £720 in tax relief, reducing the amount you pay to just £2,880.

Remember tax rules can change over time and the relief you receive will depend upon your circumstances.

Download our Guide to Pension Tax Relief

Pension tax relief calculator

Use our pension tax relief calculator to find out how much tax relief you could receive on your pension contribution.

Calculate your tax relief

Tax relief calculator

Additional tax benefits

  • No capital gains tax or further income tax
    Investments in a pension can grow free of UK capital gains tax and further income tax.
  • Up to 25% tax-free lump sum when you retire
    Any time from age 55 (57 from 2028), you can normally take up to 25% of your SIPP as a tax-free lump sum and receive a taxable income from the remainder if you wish. From 6 April 2015 you will be able to take as much of your pension as you wish either as income or a lump sum, with the first 25% usually tax free and the rest taxed as income.

  • Pass on your pension tax free to your heirs
    Any money left in your pension when you die can usually be passed to your heirs free of inheritance tax. Any withdrawals they then make will be tax free if you died before you were 75. If you die when 75 or older any withdrawals will be taxed as their income or potentially taxed at 45% if taken as single lump sum.
Tax savings

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Important information

The pension and tax rules are subject to change by the government. Tax reliefs and state benefits referred to are those currently applying. Their value depends on your individual circumstances.

96% of clients would recommend the Vantage SIPP to friends and family*

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*HL survey: 252 respondents, November 2014

Important information

A SIPP is a type of pension for people happy to make their own investment decisions. Investments go down in value as well as up so you could get back less than you invest. The rules mentioned are those currently applying and could change in the future. You can normally only access the money from age 55. Tax reliefs depend on your circumstances. This website is not personal advice, if you are unsure an investment is right for you, please seek advice.

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