Still time to top up your pension contributions

With the end of the 2025–26 tax year approaching on 5 April 2026, there is still time for taxpayers to increase their pension savings and benefit from valuable tax relief. Pension contributions remain one of the most tax-efficient ways to save for retirement, with relief available at a taxpayer’s highest marginal rate.

Tax relief on private pension contributions is generally available on contributions of up to 100% of relevant earnings, subject to certain limits. The relief effectively reduces the cost of saving into a pension. Basic rate taxpayers benefit from 20% tax relief, while higher rate taxpayers can claim 40% relief and additional rate taxpayers can receive 45% relief on their contributions.

For basic rate taxpayers, the initial 20% relief is usually applied automatically by the pension provider. Higher and additional rate taxpayers can claim the extra relief through their self-assessment or by contacting HMRC if they do not normally file a return.

Most individuals can contribute up to the annual allowance of £60,000 each tax year while still benefiting from tax relief. Contributions above this limit can trigger an annual allowance charge. However, it may be possible to contribute more by using the carry forward rules, which allow unused pension allowances from the previous three tax years to be used, provided they made pension contributions during those years.