188体育

Your private pension contributions are tax-free up to certain limits.

This applies to most private pension schemes, for example:

• workplace pensions
• personal and stakeholder pensions
• overseas pension schemes that qualify for UK tax relief - ask your provider if it鈥檚 a 鈥榪ualifying overseas pension scheme鈥�

You pay tax when you take money out of a pension.

Limits to your tax-free contributions

You usually pay tax if savings in your pension pots go above:

• 100% of your earnings in a year - this is the limit on tax relief you get
• 拢60,000 a year - check your 鈥榓nnual allowance鈥�

You also pay tax on contributions if your pension provider:

• is not registered for tax relief with HMRC
• does not invest your pension pot according to HMRC鈥檚 rules

You can get tax relief on private pension contributions worth up to 100% of your annual earnings.

You鈥檒l either get the tax relief automatically, or you鈥檒l have to claim it yourself. It depends on the type of pension scheme you鈥檙e in, and the rate of Income Tax you pay.

There are two kinds of pension schemes where you get relief automatically. Either:

• your employer takes workplace pension contributions out of your pay before deducting Income Tax
• your pension provider claims tax relief from the government at the basic 20% rate and adds it to your pension pot (鈥榬elief at source鈥�)

UK tax relief is also available on contributions made to certain types of overseas pension schemes.

Relief at source

You get relief at source in all personal and stakeholder pensions, and some workplace pensions.

To get relief at source

Before paying into a scheme, you need to agree to certain conditions about your contributions (鈥榤ake declarations鈥�). Your pension provider will tell you what these are.

You also need to give your pension provider your:

• full name and address
• date of birth
• National Insurance number
• employment status - or tell them if you鈥檙e retired, a full time student, a carer or aged under 16

Your employer may do this for you if you鈥檙e automatically enrolled in their pension scheme.

Your pension provider will let you know if this is the case and ask you to confirm your details are correct. You must do this within 30 days.

Claiming tax relief yourself

In some cases, you need to claim tax relief on pension contributions yourself. You鈥檒l need to make a claim if:

• you pay Income Tax at a rate above 20% and your pension provider claims the first 20% for you (relief at source)
• your pension scheme is not set up for automatic tax relief
• someone else pays into your pension

If you鈥檙e paying in an amount greater than 拢10,000, find out how to claim tax relief.

If you pay Income Tax above 20% (England, Wales or Northern Ireland)

You can claim additional tax relief on your Self Assessment tax return for money you put into a private pension of:

• 20% up to the amount of any income you have paid 40% tax on
• 25% up to the amount of any income you have paid 45% tax on

If you do not file a Self Assessment tax return, find out how to claim tax relief.

Example

If you pay Income Tax above 20% (Scotland)

You can claim additional tax relief on your Self Assessment tax return for money you put into a private pension of:

• 1% up to the amount of any income you have paid 21% tax on
• 22% up to the amount of any income you have paid 42% tax on
• 25% up to the amount of any income you have paid 45% tax on
• 28% up to the amount of any income you have paid 48% tax on

If you do not file a Self Assessment tax return, find out how to claim tax relief.

If your pension scheme is not set up for automatic tax relief

Claim tax relief in your Self Assessment tax return if your pension scheme is not set up for automatic tax relief.

If you do not file a Self Assessment tax return, find out how to claim tax relief.

If someone else pays into your pension

When someone else (for example your partner) pays into your pension, you automatically get tax relief at 20% if your pension provider claims it for you (relief at source).

If you鈥檙e in a workplace pension, find out how to claim tax relief on those contributions.

Submit or increase a claim over 拢10,000

Find out how to claim tax relief if you:

• make a new claim for a pension contribution over 拢10,000
• increase your current claim by more than 10% (if the current claim is already over 拢10,000)

If you do not pay Income Tax

You still automatically get tax relief at 20% on the first 拢2,880 you pay into a pension each tax year (6 April to 5 April) if both of the following apply to you:

• you do not pay Income Tax, for example because you鈥檙e on a low income
• your pension provider claims tax relief for you at a rate of 20% (relief at source)

Life insurance policies

You cannot get tax relief if you use your pension contributions to pay a personal term assurance policy, unless it鈥檚 a protected policy.

Personal term assurance is a life insurance policy that either:

• ends when the first insured person dies
• insures people who are all from the same family

Your annual allowance is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay tax.

You鈥檒l only pay tax if you go above the annual allowance. This is 拢60,000 this tax year.

What counts towards the annual allowance

Your annual allowance applies to all of your private pensions, if you have more than one. This includes:

• the total amount paid in to a defined contribution scheme in a tax year by you or anyone else (for example, your employer)
• any increase in a defined benefit scheme in a tax year

If you use all of your annual allowance for the current tax year

You might be able to carry over any annual allowance you did not use from the previous 3 tax years.

When your annual allowance is lower than 拢60,000

Your annual allowance might be lower if you have:

• flexibly accessed your pension pot
• a high income

If you flexibly access your pension

Your annual allowance might be lower if you flexibly access your pension. For example, this could include taking:

• cash or a short-term annuity from a flexi-access drawdown fund
• cash from a pension pot (鈥榰ncrystallised funds pension lump sums鈥�)

The lower allowance is called the 鈥榤oney purchase annual allowance鈥�.

If you have a high income

You鈥檒l have a reduced (鈥榯apered鈥�) annual allowance in the current tax year if both:

• your 鈥榯hreshold income鈥� is over 拢200,000
• your 鈥榓djusted income鈥� is over 拢260,000

The threshold income and adjusted income limits are different for earlier tax years.

Work out your reduced annual allowance.

If you go above the annual allowance

You鈥檒l get a statement from your pension provider telling you if you go above the annual allowance in their scheme. If you鈥檙e in more than one pension scheme, ask each pension provider for statements.

You can also use a calculator to .

If you go over your annual allowance, either you or your pension provider must pay the tax.

Fill in the 鈥楶ension savings tax charges鈥� section of a Self Assessment tax return to tell HMRC about the tax, even if your pension provider pays all or part of it. You鈥檒l need form SA101 if you鈥檙e using a paper form.

HMRC does not tax anyone for going over their annual allowance in a tax year if they:

• retired and took all their pension pots because of serious ill health
• died

You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is 拢268,275. This is known as the lump sum allowance.

You or your beneficiaries may be able to take a tax-free lump sum of up to 拢1,073,100 in certain circumstances.

For example, if you take a lump sum due to serious illness or your beneficiaries are paid certain lump sum death benefits. This is known as the lump sum and death benefit allowance.

If you take a lump sum that goes above your allowances, you鈥檒l need to pay Income Tax on the extra amount.

Your pension provider will take off the charge before you get your payment.

If you hold a protected allowance, this may increase the amount of tax-free lump sums you can take from your pensions.

Check how much lump sum allowance you鈥檝e used

Ask your pension provider how much you鈥檝e used of:

• your lump sum allowance

• your lump sum and death benefit allowance

You must add up how much of your allowances you鈥檝e used in all the pension schemes you鈥檙e in.

What counts towards your lump sum allowance

It depends on the type of lump sum taken.

It counts towards your lump sum allowance if you take any of the following:

• a pension commencement lump sum
• an uncrystallised funds pension lump sum (the 25% tax-free part)
• a standalone lump sum

It counts towards your lump sum and death benefit allowance if you take either of the following:

• a serious ill-health lump sum
• certain lump sum death benefits paid to your beneficiaries

Any lump sum that counts towards your lump sum allowance will also count towards your lump sum and death benefit allowance.

Protect your lifetime allowance

The lifetime allowance was abolished on 6 April 2024. If you had pension savings before April 2016, you may be able to apply to protect your lifetime allowance from when it was reduced in April 2016.

This protection also applies to your lump sum allowance and lump sum and death benefit allowance.

If you have the right to take your pension benefits before you鈥檙e 50

You may have a reduced lump sum allowance or lump sum and death benefit allowance if all the following apply:

• you had an eligible job (for example professional sports, dance and modelling)聽
• you joined your pension scheme before 2006
• you take a lump sum before you鈥檙e 55

Your lump sum allowance or lump sum and death benefit allowance is not reduced if you鈥檙e in a pension scheme for uniformed services - for example the armed forces, police and fire services.