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Pension tax relief – eligibility

Tax relief can only be claimed for the tax year the contribution is actually made. How much you save towards a pension is usually tax-free, up to certain limits, see below for a detailed breakdown. 

  • You cannot get tax relief on contributions that are more than 100% of your earnings in a tax year, and
  • regardless of your earnings, you may pay tax on contributions over £40,000 gross in a year, unless you have any unused annual allowance in the previous three tax years.
  • If you have previously flexibly accessed benefits from a defined contribution pension scheme, tax would be payable on your contributions to a defined contribution scheme which are over 100% of your earnings or the Money Purchase Annual Allowance (MPAA) £4,000 per annum* gross whichever is lower. If you are contributing towards a defined benefit scheme, the limit is still 100% of your earnings or £40,000, whichever is lower.

You also cannot get tax relief if your pension provider isn’t registered with HM Revenue and Customs

If you don’t have earnings, you can still get tax relief on your contributions up to £2,880 net.

If you are 75 or older you can technically contribute towards a pension scheme, but your contributions will not qualify for tax relief.

There are different rules that apply if you are not currently UK resident or paying into a qualifying overseas pension.

To read more about pensions and tax, please read our dedicated pages or contact our team direct. 

*The Money Purchase Annual Allowance was introduced on 6th April 2015 and was set at £10,000 gross p.a. The government has now reduced the MPAA to £4,000 gross p.a. which applies to contributions made from the 6th April 2017.

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

  • This page explains about how and when tax relief applies 
  • You can read more about tax and pensions here
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