Answers · UK 2025/26
How does higher rate pension tax relief work?
Higher rate taxpayers get 40% pension tax relief: 20% via the pension provider (or payroll), and another 20% claimed through self-assessment.
Full answer
Under relief at source, a higher rate taxpayer contributes £800 net, receives £200 from HMRC (making £1,000 gross), then claims an additional £200 via self-assessment (extending the basic rate band). Total relief: 40% on £1,000 = £400 out of pocket for a £1,000 pension contribution. Under net pay arrangement, contributions come from gross pay so full relief is automatic. Scottish higher rate taxpayers (21-42%) may have different calculations. Always claim pension contributions on self-assessment returns.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.