Glossary · UK
What is Relief at Source (Pension)?
A method of giving pension tax relief where contributions are paid net and topped up by the provider.
Full Definition
Relief at source is one of the two main ways UK workplace and personal pensions give tax relief on contributions. The member's contribution is deducted from take-home pay after tax and paid to the pension provider, which then claims basic-rate tax relief (currently 20%) from HMRC and adds it to the pot — so a £80 net contribution becomes £100 in the pension. Higher and additional-rate taxpayers must claim the extra relief themselves through Self Assessment or by contacting HMRC, unlike the net pay arrangement where relief is given automatically at the full marginal rate.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.