UK Pension Tax Relief Calculator for Higher Rate Taxpayers
Calculate Your Tax Relief
Automatic Tax Relief (25%): £125.00
Additional Tax Relief to Claim (25%): £125.00
Total Tax Relief: £250.00
Understanding Higher Rate Pension Tax Relief
Many people find pension tax relief confusing - and for good reason! The way it's structured isn't very intuitive. Let's break it down together and see how your money actually grows.
Starting Point: Your Contribution
Let's say you contribute £100 from your take-home pay (after tax)
£100
Step 1: Basic Rate Relief (Automatic)
Your pension provider automatically adds 25% (£25). This makes your contribution "gross"
£100
+£25
Step 2: Higher Rate Relief (You Claim This Back)
As a higher rate taxpayer, you can claim an additional 25% tax relief through your tax return
£100
+£25
+£25
Why This Is Confusing
The term "gross contribution" often throws people off because:
- It only includes your contribution plus the basic rate relief
- The higher rate relief comes back to you separately through your tax return
- This means the total benefit is actually more than the "gross" amount!
The Bottom Line
For every £100 you contribute:
- Your pension pot receives £125 (your contribution + basic rate relief)
- You get £25 back through your tax return
- Total value: £150