Overview
Paying into a pension helps you save for retirement and receive tax relief. Employees and employers usually both contribute to a workplace pension, and many people add a personal pension or SIPP.
Tax relief on pension contributions
- Relief limit: personal tax relief applies to the higher of £3,600 gross or 100% of earnings.
- Annual allowance: contributions above £60,000 a year may trigger an income tax charge.
- Money purchase cap: the limit may fall to £10,000 once money purchase pensions have been accessed.
- Carry forward: unused allowance can be carried forward for three years.
- Tapered allowance: reduced by £1 for every £2 of income above £260,000, to a minimum of £10,000.
- Employers get tax relief on contributions paid wholly and exclusively for the trade.
Automatic enrolment
Employers must automatically enrol eligible jobholders into a qualifying workplace pension. The minimum employer contribution is 3% and the minimum total is 8%.
| 2026/27 | 2025/26 | |
|---|---|---|
| Automatic enrolment earnings trigger | £10,000 | £10,000 |
| Qualifying earnings band, lower limit | £6,240 | £6,240 |
| Qualifying earnings band, upper limit | £50,270 | £50,270 |
State Pensions
The full new State Pension needs 35 qualifying National Insurance years, with a minimum of 10.
| Weekly rate | 2026/27 | 2025/26 |
|---|---|---|
| Basic State Pension, single person | £184.90 | £176.45 |
| New State Pension | £241.30 | £230.25 |
FAQs
Frequently asked questions
Who pays pension contributions?
Employees pay a percentage of salary, employers pay at least the minimum, and the government adds tax relief.
What is the annual allowance?
The most you can pay into all your pensions in a tax year with tax relief. Contributions above it may face a tax charge.
How do I get tax relief?
Basic rate relief is usually added automatically. Higher and additional rate taxpayers may claim the rest through Self Assessment.