Pension contributions can reduce your tax liability, but restrictions on contributions exist, especially for high-income earners.
Receiving tax relief on pension contributions
The government rewards people for contributing to their pension – and their future finances – by granting tax relief on pension contributions. Some tax you would normally owe HMRC will be redirected to your pension.
You’ll receive 20%, 40% or 45% tax relief depending on your taxpayer status. For example, adding £100 to your pension will only cost a basic rate taxpayer (20%) £80 and the government will top up the remaining £20 (the rules are different in Scotland).
The amount contributed to your pension can benefit from tax relief, providing it doesn’t exceed an annual allowance. If you stay within the annual allowance within a tax year, you can receive tax relief on £60,000 or 100% of your income, whichever is lower.
What is the annual allowance?
The pension annual allowance is an amount of money you can contribute to your defined contributions pension – and the amount of benefits you can build within the scheme for tax relief. The current annual allowance is set at £60,000* or 100% of your income whichever is lower and includes both you and your employer’s contributions across all of your pensions except your State Pension.
There is a reduced annual allowance for high-income earners. We explain this further below.
What happens if I exceed the allowance?
If you exceed the £60,000* annual allowance, you will be subject to a tax charge called an annual allowance charge. There are strategies to mitigate this charge using unused portions of annual allowance from previous tax years.
The Tapered Annual Allowance (TAA)?
The Tapered Annual Allowance (TAA) is a reduced annual allowance for high-income individuals. These individuals’ allowance will be reduced by £1 for every £2 that their adjusted income exceeds £260,000, to a minimum tapered allowance of £10,000.
*Tax year 2026/2027
TAXATION ADVICE IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.
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FAQ'S
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.