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Pension Calculator

Work out the real cost of your pension contributions after tax relief, and check your 2026/27 annual allowance position.

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GBP / yr
GBP / yr
2026/27: Annual allowance £60,000 (total employer + employee). Tapered for adjusted income above £260,000 — reduces by £1 per £2, minimum £10,000. Basic-rate taxpayers: 20% relief automatically added. Higher-rate taxpayers: claim additional 20% via Self Assessment. Additional-rate taxpayers: claim additional 25% via Self Assessment.

Real Cost of Your Contributions

After tax relief
£0

How pension tax relief works

The UK government adds tax relief to your pension contributions at your marginal income tax rate, making pensions one of the most tax-efficient ways to save. When you contribute £800 to a relief-at-source pension, your provider claims 20% basic-rate relief from HMRC — topping it up to £1,000. If you are a higher-rate (40%) taxpayer, you can claim an additional 20% (£200) back through your Self Assessment return, bringing your effective cost down to £600.

The annual allowance is £60,000 for 2026/27 — this covers all contributions (yours plus your employer's) across all pension schemes. Unused allowance from the previous three years can be carried forward. The tapered annual allowance applies to very high earners: if your adjusted income exceeds £260,000, your allowance reduces by £1 for every £2 above that threshold, down to a minimum of £10,000.

FAQ

What is the difference between relief at source and net pay?
With relief at source (most personal pensions, SIPPs), you pay 80p and the provider claims 20% from HMRC. Higher-rate taxpayers claim the rest via Self Assessment. With net pay (most workplace schemes), contributions are taken before tax — so you automatically get full relief at your marginal rate without a separate claim.
Can I contribute more than the annual allowance?
Yes, but the excess is subject to an Annual Allowance Charge at your marginal rate, effectively eliminating the tax benefit. You can use carry-forward to use unused allowance from the previous three years if you've been a member of a registered pension scheme in those years.
What is the Money Purchase Annual Allowance (MPAA)?
Once you flexibly access defined contribution pension income, your annual allowance for money purchase pensions drops to £10,000 (the MPAA). This prevents "recycling" — taking pension income and re-contributing it for tax relief.
Will unused pension pots be subject to inheritance tax?
From April 2027, most unused pension funds and death benefits will be included in a deceased's estate for inheritance tax purposes. This is a major change — previously, pension funds passed outside the estate free of IHT. Speak to a financial adviser about the implications for your estate plan.