Pension tax relief calculator

Thanks to tax relief, paying into your pension could cost you less than you might think.

The government automatically gives you a top up in basic rate tax relief on anything you pay in. You just need to be under 75 and resident in the UK for tax purposes. For example, say you made an £8,000 pension contribution, you’d get a £2,000 top up from the government, bringing your total contribution up to £10,000.

If you pay tax at a higher rate, you can claim even more through your tax return.

Calculate your pension tax relief

Enter the amount you earn below and what total pension contribution you want to make. The calculator will show you how much you’ll need to pay in yourself, how much tax relief the government will add, and how much you could reclaim if you pay tax at a higher rate.

Scottish taxpayers make sure you tick the ‘I pay income tax in Scotland’ box, because different tax bands and rates apply to your income which will affect your results.

Your annual income

How much would you like to contribute £

I pay income tax in Scotland

About your results

This calculator isn’t personal advice and doesn’t confirm if you’re eligible or how much you can pay into a pension. Results are a guide based on 2022/23 tax rules and don’t cover every situation. Tax rules can change and the relief you receive will depend on your circumstances. Any contributions over your annual allowance could trigger a tax charge. Remember, your annual allowance may be reduced if you’re a high earner or have taken flexible pension benefits.

Assumptions used

The calculator covers the income tax bands and the proportion of the contribution that falls into each one; the personal allowance (£12,570 in 2022/23) and the gradual loss of personal allowance between an income of £100,000 and £125,140. Tax relief can only be claimed on contributions up to your earnings (or £3,600 if you’re not working). Non-Scottish UK taxpayers must pay sufficient tax at the higher or top rate to claim the full higher (40%) or top (45%) rate tax relief. Scottish taxpayers must pay enough tax at the Scottish intermediate, higher or top rate to claim the full Scottish intermediate (21%), higher (41%) or top (46%) rate tax relief. Other factors may affect how much tax relief you're eligible to claim.

Guide to pension tax relief

Open a pension today

If you want to take charge of your investments, as well as benefit from tax relief, you could consider opening a HL Self-Invested Personal Pension. You can make monthly contributions from as little as £25 and as many one-off payments as you like (£100 minimum). Once paid into a pension, money can’t usually be taken out again until age 55 (57 from 2028). Investments fall as well as rise in value so you could get back less than you put in.

More about the HL SIPP

Top up your SIPP

If you want to take charge of your investments, as well as benefit from tax relief, you could consider topping up your HL SIPP. You can make monthly contributions from as little as £25 and as many one-off payments as you like (£100 minimum). Once paid into a pension, money can’t usually be taken out again until age 55 (57 from 2028). Investments fall as well as rise in value so you could get back less than you put in.

Top up your SIPP

For more details of the Scottish rate of Income Tax please see GOV.UK

This is your current annual taxable income. It will be used to calculate the amount of tax relief you are eligible to receive.

This is the gross lump sum contribution you would like to pay into your pension. It will be used to calculate the net amount you'll actually pay and the basic rate tax relief you'll receive from the government. A £40,000 annual allowance currently applies to most people, although you may be able to carry forward unused allowances to invest as much as £160,000 now. The figures are for the 2022/2023 tax year.

Why have we used these figures?

The chancellor will announce the outcome of a review of pension tax relief on 16 March 2016. It has been widely reported he is considering introducing a single savings incentive of between 25% and 33% for everyone.

It is important to note nothing has been confirmed. The chancellor could decide to change nothing or choose a different system.