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Pension contributions

Pension contributions

How much can I contribute to my pension?

How much you can pay into your pension depends on your personal circumstances.

Your pension contributions are limited by the pension annual allowance which is £60,000 each tax year for most people. Any contributions made by you and your employer count towards it, as does any basic-rate tax relief added by the government.

If you’re a UK resident under the age of 75, you can get pension tax relief on what you pay in, even if you don’t work or pay tax.

To get tax relief, your personal contributions can’t be any higher than your earnings, or £3,600 if this is greater. If you want to contribute above the amount you earn, your employer might be able to make an employer pension contribution, although these are still subject to the annual allowance.

Keep in mind that pension and tax rules can and do change, and any benefits will depend on your circumstances.

More about pension tax relief

Pension contribution example

If you wanted to contribute £35,000 gross into a pension, then you would only have to pay in £28,000 as the government will automatically add basic rate tax relief (20%) of £7,000.

Use the pension tax relief calculator to find out how much tax relief you could get.

Pension contribution example

If you wanted to contribute £35,000 gross in to a pension, then you would only have to pay in £28,000 as the government will automatically add basic rate tax relief (20%) of £7,000.

Use the pension tax relief calculator to find out how much tax relief you could get.

Understanding your pension allowances

Annual pension allowance

The pension contribution limit is set at £60,000, although this can vary depending on your earnings.

Explore your annual allowance

Tapered annual allowance

If you're an additional-rate taxpayer, your annual allowance may be tapered down to as little as £10,000.

More on the tapered annual allowance

Money Purchase Annual Allowance

After flexibly accessing your pension, your contributions to money purchase pensions are limited to £10,000 per tax year.

More on the Money Purchase Annual Allowance

New lump sum, lump sum and death benefit and overseas transfer allowances

The lump sum, lump sum and death benefit and overseas transfer allowances have replaced the lifetime allowance.

More on the new allowances

Increase your allowance with 'carry forward'

Take advantage of unused pension annual allowance from the previous three tax years, allowing you to potentially contribute up to £200,000 including tax relief.

Find out if you can benefit from pension carry forward

We keep track of all the latest updates to pension and tax rules so you don't have to. View our rule updates tracker.

Employer pension contributions

Having your employer contribute to a pension can be one of the most tax efficient ways to grow your retirement savings. We take a look at how employer contributions work and why they're so effective.

More about employer contributions

What are the benefits of contributing to a pension?

  • Tax free investing
    Grow your money free of UK income and capital gains tax.
  • Shelter up to £60,000
    And get up to 45% tax relief in your pension each tax year.
  • Free from inheritance tax
    Pass on wealth tax-efficiently, and in some cases completely tax free.

Pension and tax rules can change and benefits depend on your circumstances. Rates and bands for Scottish taxpayers may be different. Typically, you need to be at least 55 (57 in 2028) to access the money in a pension. Investments can rise and fall in value, so you could get back less than you invest.

Join over 500,000 clients already using the HL SIPP

  • Flexible payments - Monthly direct debits from as little as £25 a month, with the ability to pause or cancel payments if you ever need to.
  • Invest where and how you want to - You can pick your own investments, select one of our ready-made portfolios, or pay a financial adviser to choose investments for you.
  • Freedom at retirement - With the HL SIPP, you're free to choose from all the main retirement options, including taking a secure or flexible income.

Learn more about the HL SIPP

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How to add money to your SIPP

Adding money to your HL Self-Invested Personal Pension (SIPP) can help you make the most of your pension annual allowances and any tax relief you could be entitled to.

The quickest way to do this is online. You’ll just need your debit card and bank account details to hand.

Make a lump sum payment

You can make a one-off lump sum payment from as little as £100. You only need to pay £80, and we’ll claim 20% tax relief to take the total payment to £100.

Start or increase a regular investment

Set up monthly payments from as little as £25 (pay £20, and we’ll claim £5 in tax relief). Or increase an existing direct debit instruction.

Frequently asked questions

Pension essentials

How much should I pay into my pension?

Not sure how much to pay into your pension? Here we explore what to consider when deciding how much to contribute, and why it pays to start early.

Read article

Can I still contribute to a pension after retirement?

We look at the reasons why you should consider paying into your pension even if you’ve already taken money out or stopped working.

Read article

Pension calculator

Find out if you're on track to get the income you want in retirement.

Try the calculator

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Help and support

If you have any questions about pensions, you can speak to one of our UK-based client support experts.

Call us on 0117 980 9926

Read our FAQs

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