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In most automatic enrolment schemes, you’ll make contributions based on your total earnings between £6,240 and £50,270 a year before tax. Your total earnings include: salary or wages

The amount of tax relief you get on your pension contributions depends on the top rate of income tax you pay. The more tax you pay, the more valuable tax relief will be to you. The worked examples below show how much it'll cost you to get a total pension contribution of £10,000, £40,000 or £100,000, depending on what rate of tax you pay.

The UK Pension Allowance allows for tax-efficient retirement savings, with tax relief on contributions up to the £60,000 annual allowance. However, high earners with an adjusted income over £260,000 face a tapered allowance, reducing their tax-free contributions. Although the Lifetime Allowance (LTA) has been abolished, tax rules on pension withdrawals remain.

How much tax do I pay on a pension lump sum? From age 55, if you have a defined contribution (DC) pension (where you've built up pension savings over your working life), you can take a 25% lump sum tax-free; you can take more, but you'll pay income tax on anything above 25%.

Explore UK State Pension tax rules, PAYE, Self Assessment, reliefs, pitfalls, and FAQs for 2025/26, tailored for taxpayers, business owners. ... sacrificing £2,000 of a £20,000 salary for a pension contribution saves £400 in tax for a basic-rate taxpayer. These schemes, detailed on GOV.UK ’s salary sacrifice page, also reduce your NI ...

If you have a defined contribution pension, you can usually take up to 25% from your pension free of income tax (the remaining 75% is taxed as earnings). Usually, this is done by taking a quarter of the pot in a single lump sum, but it is also possible to take a series of smaller lump sums, with 25% of each one being tax-free.

Contributions - you may be able to claim UK tax relief on contributions to certain qualifying overseas ... Basic rate taxpayers (20% income tax) - receive 20% pension tax relief. For example, if you contribute £100 into your pension, the government adds £20 tax relief. So £120 goes into your pension at a £100 net cost to you. Higher rate ...

Planning for inheritance tax changes Deferring your State Pension Below we go into more detail about each strategy. Maximise your tax-free lump sum If you have a defined contribution pension, you can take up to 25% of your pot tax-free, up to a maximum of £268,275. The remaining 75% is subject to income tax.

The amount of tax relief you get depends on the level of income tax you pay. Here’s a quick overview for a personal pension: Everyone will get 20% basic tax relief automatically added to their personal pension contributions. This means for every £80 you pay into your personal pension, you get £20 tax relief added automatically, meaning the total amount contributed is £100.

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; £60,000 a year ...

The limit on tax relievable pension contributions for 2025/26 is £60,000 or 100% of your salary (whichever is lower) ... You have ‘relevant UK earnings’*, subject to income tax *Relevant UK earnings are normally your total taxable earnings from UK-based work. This includes earnings from employment, self-employment and bonuses.

Understanding tax when you get a pension. Whether you receive a State Pension, a private pension or a workplace pension, you may have to pay tax.. You pay income tax if your total annual income ...

Personal contributions. Personal contributions of up to 100 per cent of relevant UK earnings in the tax year that the contribution is made will qualify for tax relief.

Your tax relief depends on how much you pay in, your income, and the highest rate of income tax you pay in a tax year. For example, for every £100 you put into your personal pension, you’ll get £25 tax relief, giving a total contribution of £125. This is because basic rate tax in the UK is currently 20% (and 20% of £125 = £25).

Individuals making pension contributions under RAS will have their tax bands increased by the ‘gross’ contribution. Where an individual net adjusted income exceeds £100,000, their personal allowance will reduce by £1 for each £2 over this income, meaning the complete loss of allowance for an individual with income over £125,140.

If your level of threshold income (net income after pension contributions) is below £200,000 you can make gross contributions to your pension funds without an income tax charge up to the annual allowance limit, which for the tax year 2024/25 is £60,000.

Tax relief on personal pension contributions. For each tax year, you can get pension tax relief on personal contributions up to 100% of your annual salary, capped at a maximum of £60,000 (2025/26). This limit is the “gross” pension contribution, meaning it includes the top up that’s added by HMRC.

Had he done so he would have done more than simply deny the tax relief on contributions as pension contributions are so useful in general financial planning. ... 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance. * * READERS' FORUM . Read All. Tax tip: Maximising tax relief on pension ...

Leaving the UK Tax Back Guide. ... Do I pay tax on pension contributions? Pension contributions are normally free from tax and shouldn’t be used to calculate your total taxable income. If you pay more than 100% of your yearly taxable earnings into a pension scheme or more than £60,000 ...