Every pound you put into a pension gets the income tax you paid on it refunded. For basic-rate taxpayers that happens automatically. For higher earners a large part of it does not, HMRC will not chase you for it, and a lot of people never claim it at all.
Under a relief at source scheme, which covers most personal pensions and SIPPs, you pay in from money you have already been taxed on. Your provider then reclaims the basic 20% from HMRC and adds it to your pot.
So £80 of your money becomes £100 in your pension. Note the direction: the top-up is 25% of what you paid in, because it restores the 20% that was taken off the original gross amount. Both descriptions are the same thing seen from different ends.
If you pay tax above the basic rate, 20% is not all you are owed. The rest is only paid if you claim it.
| Your tax rate | Automatic | You claim | £100 in your pension costs |
|---|---|---|---|
| Basic (20%) | 20% | nothing | £80 |
| Higher (40%) | 20% | 20% | £60 |
| Additional (45%) | 20% | 25% | £55 |
The claimable part only applies to contributions covered by income actually taxed at that rate. If you are a higher-rate taxpayer by £3,000, only £3,000 of contributions attracts the extra 20%; the rest gets basic rate.
This is the money most often left on the table. Nothing on your payslip or your pension statement flags it, HMRC does not write to you about it, and the pension pot looks perfectly correct without it, because the missing part is a refund of your income tax, not a shortfall in the pot.
Put in your salary and contributions to see the automatic top-up, the extra you can claim back from HMRC, and what the contribution really costs you.
Open the pension tax relief calculator →Before claiming anything, work out how your contributions are made, because two of the three arrangements give you full relief already and claiming again would be wrong.
Your payslip is the quickest test. If the pension deduction is taken after tax, you are on relief at source. If your taxable pay is already reduced by the contribution, you are not.
Two routes, depending on whether you file a return:
You can normally go back four tax years. A claim made during 2026/27 can therefore reach back to 2022/23, which for someone who has been contributing throughout and never claimed is often a substantial sum in one go.
Between £100,000 and £125,140 your personal allowance is withdrawn by £1 for every £2 earned. Combined with 40% tax, that makes the effective rate on income in this band about 60%, and pension relief is worth the same 60% going the other way.
A worked example. You earn £110,000 and pay £8,000 into a pension, which becomes £10,000 with the automatic top-up. That brings your income for allowance purposes back to £100,000, restoring £5,000 of personal allowance:
| Step | Amount |
|---|---|
| You pay in | £8,000 |
| Automatic 20% top-up | £10,000 in the pension |
| Higher-rate relief claimed back | £2,000 |
| Restored personal allowance, taxed at 40% | £2,000 |
| Real cost of £10,000 in your pension | £4,000 |
Every £1 in the pension costs 40p. There is no other legal relief in the UK tax system of that size available to an ordinary employee, which is why pension contributions are the standard answer for anyone whose income strays into this band.
The automatic 20% is the same, but the extra you can claim follows the Scottish bands:
| Scottish rate | Extra you can claim |
|---|---|
| Intermediate, 21% | 1% |
| Higher, 42% | 22% |
| Advanced, 45% | 25% |
| Top, 48% | 28% |
Scottish taxpayers reach the higher rate at £43,663, well below the £50,271 threshold elsewhere, so more people qualify for claimable relief and more of them miss it.
The government refunds the income tax you paid on money you put into a pension. Under relief at source, you pay in from your take-home pay and your provider automatically reclaims 20% from HMRC, so £80 of your money becomes £100 in the pension. Higher and additional-rate taxpayers are owed more than 20%, but that extra is not automatic and has to be claimed.
Through your Self Assessment tax return if you file one, in the section for personal pension contributions, using the gross figure including the 20% already added. If you do not file a return, contact HMRC directly with details of your contributions. You can normally backdate a claim four tax years, so a claim made in 2026/27 can reach back to 2022/23.
20% is automatic for everyone under relief at source. A higher-rate taxpayer can claim a further 20% on contributions covered by income taxed at 40%, and an additional-rate taxpayer a further 25% on income taxed at 45%. So £100 in your pension costs £80 at basic rate, £60 at higher rate and £55 at additional rate.
Because their workplace scheme uses a net pay arrangement or salary sacrifice rather than relief at source. In those, the contribution comes out of gross pay before income tax is worked out, so full relief at your marginal rate is already given and there is nothing to claim. Relief at source is the one that leaves higher-rate relief unclaimed, and your payslip or provider will tell you which you are on.
The automatic top-up is still 20%, but the extra you can claim follows the Scottish bands: 1% more for intermediate-rate taxpayers on 21%, 22% for the 42% higher rate, 25% for the 45% advanced rate and 28% for the 48% top rate. Scottish intermediate-rate taxpayers are the ones most likely to miss it, because the extra is small and easy to overlook.
Relief is limited to 100% of your earnings in the tax year, and separately by the annual allowance of £60,000 for 2026/27, which counts your contributions plus your employer's. The allowance tapers for high earners down to a minimum of £10,000, and drops to a £10,000 Money Purchase Annual Allowance once you have flexibly accessed a pension. If you earn nothing you can still put in £2,880 a year and receive £720 of relief.
Not financial or tax advice. General information on how pension tax relief works for 2026/27. Figures assume a standard tax code and no other complicating income. Whether a pension contribution is right for you depends on your circumstances, and money in a pension is normally locked until age 55, rising to 57 in 2028. Check your own scheme type before claiming, because claiming relief you have already received creates a tax problem rather than solving one. Sources: gov.uk pension tax relief, annual allowance, Scottish income tax, UK tax rates 2026/27.