UK Pension Tax Relief Calculator
What a pension contribution really costs in 2026/27 after tax relief — relief at source, net pay or salary sacrifice, Scottish or rest-of-UK rates, the higher-rate claim, NI and student-loan savings, the 60% trap, Child Benefit charge and the annual allowance.
How it works
relief = income tax on your income − income tax on (income − gross contribution), at least 20% under relief at source · salary sacrifice also saves NI (8% / 2%) and student loan repayments · net cost = gross − relief − NI saved − Child Benefit charge avoided · annual allowance £60,000 (tapered by £1 per £2 of adjusted income over £260,000 to a £10,000 minimum; £10,000 MPAA) plus 3 years’ carry forward
Pension contributions come from untaxed income, so their real cost depends on your marginal rate. For 2026/27 the personal allowance is £12,570, the higher rate starts at £50,270 and the additional rate at £125,140 in England, Wales and Northern Ireland; Scotland has six bands from 19% to 48%. With relief at source you pay 80% and the provider claims 20% from HMRC; higher and additional-rate taxpayers claim the rest through Self Assessment or by asking HMRC to adjust their tax code. Net pay schemes take the contribution before tax, so relief is automatic at your top rate, but they give nothing to people who pay no tax. Salary sacrifice swaps pay for an employer contribution, saving National Insurance (8% up to £50,270, 2% above) and student loan repayments too; some employers add their 15% NI saving. Because contributions reduce adjusted net income, they can also restore the personal allowance lost between £100,000 and £125,140 and reduce the High Income Child Benefit Charge between £60,000 and £80,000. Tax relief is limited to your earnings (or £3,600 gross if you earn less), and total contributions including your employer’s count towards the £60,000 annual allowance, which is tapered for very high earners; unused allowance from the previous three years can be carried forward.
Worked example
£10,000 gross on £70,000 income in England: income tax falls by £4,000 (40% on the whole amount). Under relief at source you pay in £8,000, the provider adds £2,000 and you claim £2,000 back, so the net cost is £6,000. By salary sacrifice the same £10,000 also saves £200 of NI (2%), so it costs £5,800. On £110,000 income, the same contribution restores £5,000 of personal allowance and costs just £4,000.
Sources: GOV.UK — Tax on your private pension contributions: tax relief · GOV.UK — Tax on your private pension contributions: annual allowance · GOV.UK — Income Tax in Scotland: current rates (2026 to 2027) · GOV.UK — High Income Child Benefit Charge · GOV.UK — Repaying your student loan: how much you repay
Frequently asked questions
How do I claim higher-rate relief?
Through your Self Assessment return, or by contacting HMRC so it adjusts your tax code. You can claim for up to four previous tax years. The calculator shows the amount under “Extra to claim on your tax return”.
Is salary sacrifice better than relief at source?
Usually yes for employees, because you also save National Insurance and, if you have a student loan, part of your repayments. The comparison table shows the net cost of each method for your income. Check how lower pay affects mortgages, statutory pay and benefits before agreeing.
Why is the relief 60% between £100,000 and £125,140?
In that band you lose £1 of personal allowance for every £2 of income, so each extra £100 of income costs £60 in tax (40% plus 20% from the lost allowance). A pension contribution that brings your income down reverses this, so £100 in your pension costs £40.
Do I get relief if I do not pay tax?
With relief at source, yes: anyone under 75 can pay in up to £2,880 a year and the provider adds 20% to make £3,600. With a net pay scheme there is no relief at the time, but HMRC now makes top-up payments to eligible low earners after the tax year.
What is the lifetime limit?
The lifetime allowance was abolished in April 2024. A cap of £268,275 on tax-free lump sums remains for most people, and the annual allowance still limits how much can go in each year with tax relief.
Related calculators
Uses 2026/27 UK rates and thresholds (rest-of-UK or Scottish income tax, Class 1 NI, student loan thresholds, Child Benefit and the High Income Child Benefit Charge). Thresholds change every April — check GOV.UK for the current figures. Educational estimate, not tax or financial advice.