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Tax relief for pension contributions


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns

Tax relief for pension contributions


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns
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The UK operates a system encouraging pension savings by providing tax relief on contributions to registered schemes (and some overseas schemes) by employers and individuals (for both employed or self employed). Benefits paid from the scheme are generally taxable, though there are significant tax-fee benefits available in specific circumstances, see the Pension income and lump sum allowances from 6 April 2024 guidance note.

Savings can accumulate in a tax-free environment within a registered scheme. If the pension scheme is a defined contribution (DC) scheme then the investment risk is entirely borne by the member. If the scheme is a defined benefit (DB) scheme, poor investment returns can result in the employer (and possibly the members) having to pay more into the scheme than anticipated, in order to meet the benefit promises associated with the scheme.

The parameters of tax relived contributions are outlines below, together with the mechanism of giving relief.

For the self employed and for higher rate relief for those in self assessment, completion of boxes 1 to 4 at the top of page

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  • 09 Apr 2025 05:33

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