How to Claim Higher Rate Tax Relief on Pension Contributions?

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Last Updated on: 11th September 2025, 05:32 am

Are you a higher earner in the UK, wondering if you’re getting the full tax benefit from your pension contributions? Many people in your situation miss out on hundreds or even thousands each year, simply because they don’t realise there’s extra tax relief to claim.

If you’re paying more than the basic rate of income tax, you’re entitled to more than the 20% relief that’s automatically applied to most pensions. But here’s the catch: you must claim it yourself. Understanding the process of reclaiming this higher rate tax relief is essential if you want to maximise your retirement savings and reduce your current tax bill.

Whether you’re employed, self-employed, or contributing through a personal pension, the rules are clear, but often overlooked. In this guide, you’ll discover who qualifies, how to calculate what you’re owed, and the most efficient ways to claim your higher rate pension tax relief.

What Is Pension Tax Relief?

Pension tax relief is a government incentive designed to encourage people to save for retirement. When you pay into a pension scheme, the government gives back some of the income tax you paid on that money, effectively boosting your pension pot. This makes it one of the most tax-efficient savings methods available in the UK.

There are two main ways tax relief can be applied:

Relief at Source: Most personal and group pensions use this. Your contributions are made after tax, and your pension provider claims basic rate tax relief (20%) from HMRC on your behalf. So, if you contribute £80, the government adds £20, making your total contribution £100.
Net Pay Arrangement: Used by some workplace schemes, your pension contributions are taken from your salary before tax is calculated. This gives you full tax relief upfront, depending on your tax rate, with no further claims necessary.

You can receive tax relief on contributions up to 100% of your relevant UK earnings, or £3,600 if you earn less. This applies to most types of pensions, including workplace pensions, personal pensions, and SIPPs.

Overall, pension tax relief is about reducing your taxable income today while securing your financial future. It can offer a real-time boost in your pay packet or a significant increase to your long-term retirement fund.

Who Is Eligible to Claim Higher Rate Tax Relief?

If you’re earning over the basic income tax threshold in the UK, you may be eligible for higher rate tax relief on your pension contributions. Many taxpayers don’t realise they’re missing out on this benefit simply because they believe their provider handles it all automatically.

You can claim higher rate relief if:

You’re a higher rate taxpayer (earning above £50,270)
You’re an additional rate taxpayer (earning above £125,140)
You’re contributing into a Relief at Source pension (like personal pensions or SIPPs)
Your contributions aren’t taken through the Net Pay Arrangement
You are not already receiving full relief through salary sacrifice or net pay methods

Higher earners who contribute to relief at source schemes need to claim the extra 20% (or 25% for additional rate) relief themselves. If you’re in a workplace pension and contributions are taken after tax, you may still be eligible to claim more relief.

It’s also important to check your pension type. For instance, if you’re in a salary sacrifice scheme or a net pay arrangement, you usually receive full tax relief automatically. But if your scheme works on a relief at source basis, that additional relief needs to be claimed manually.

Making sure you’re eligible and knowing your scheme type is the first step toward unlocking the extra savings you’re owed.

How Much Higher Rate Tax Relief Can You Actually Claim?

Claiming higher rate tax relief can significantly reduce the actual cost of your pension contributions. If you’re paying income tax at 40% or 45%, you can claim back more than just the standard 20% added automatically by your provider. But how much can you really get back?

When you make a personal pension contribution, the provider adds 20% tax relief automatically. If you’re a higher rate taxpayer, you’re entitled to an additional 20% tax relief (or 25% for additional rate taxpayers). You claim this through your self-assessment tax return or online tool provided by HMRC.

Breakdown with Simple, Relatable Examples

Let’s say you pay £8,000 into your personal pension:

Your provider claims 20% from HMRC and adds £2,000
Total contribution to your pension pot £10,000
If you’re in the 40% tax bracket, you’re entitled to another £2,000
If you’re in the 45% bracket, you could claim an extra £2,500

Cost Breakdown by Tax Band

Tax Band	Contribution Paid	HMRC Adds 20%	Additional Relief	Total Relief	Effective Cost
Basic Rate (20%)	£8,000	£2,000	£0	£2,000	£8,000
Higher Rate (40%)	£8,000	£2,000	£2,000	£4,000	£6,000
Additional Rate (45%)	£8,000	£2,000	£2,500	£4,500	£5,500

What Affects the Total Amount You Can Claim?

Your total gross income and how much falls into the higher or additional rate bands
The type of pension scheme you are contributing to
Whether contributions were net of tax or through salary sacrifice
How much you have contributed to the annual allowance

Remember, you can only claim higher rate tax relief on the part of your income that’s taxed at those higher rates. If only part of your income is above the £50,270 threshold, then only a portion of your contributions will qualify for the extra relief.

Which Pensions Qualify for Extra Tax Relief?

Not all pensions are the same when it comes to claiming additional tax relief. Some automatically give you the full benefit upfront, while others require you to manually reclaim it later. Understanding which pension schemes qualify is essential.

Most personal pensions, including Self-Invested Personal Pensions (SIPPs), use the Relief at Source method. These allow you to get basic rate tax relief automatically, with higher rate relief needing to be claimed.

Here’s a breakdown of qualifying pension types:

Personal Pensions (Relief at Source): You pay in after tax, and 20% is claimed automatically. You must claim any higher rate relief separately.
Workplace Pensions (Relief at Source): Same as above, unless your employer uses a different method.
Workplace Pensions (Net Pay): Contributions come out of your salary before tax, so you automatically get full tax relief at your highest rate.
Salary Sacrifice Pensions: Your employer pays the contribution directly. This method reduces your salary and your income tax automatically.

To determine if your pension qualifies, check with your provider or employer. Ask them if it uses “relief at source,” “net pay,” or “salary sacrifice.” This will tell you whether you need to take action to claim what you’re owed.

How Do You Claim Higher Rate Tax Relief on Pension Contributions?

If you’re a higher earner in the UK, and your pension is set up under a Relief at Source scheme, then you must claim the extra tax relief you’re entitled to. Thankfully, HMRC now offers two primary methods to do this, and both are relatively straightforward.

Self Assessment Tax Return

If you have already completed a self-assessment, you can claim within it
Navigate to the “Tax Reliefs” section
Enter your gross pension contributions (your contribution + 20% provider relief)
HMRC calculates and refunds the additional 20% or 25% you’re due

HMRC Online Tool (New from 2025)

For those who don’t file self-assessments
Sign in with your Government Gateway ID
Submit details, including your pension type, contributions, provider, and NI number
Upload proof of contributions if requested

You Can Also Choose How You’d Like to Receive Your Relief

As a rebate paid into your bank account
As a reduction in your annual tax bill
Through an adjustment in your tax code

The process typically takes a few weeks, and HMRC may follow up for additional verification if needed. But once it’s done, you’ll either pay less tax or get some back in your pocket.

Can You Claim for Previous Tax Years?

If you’ve only just discovered that you’re eligible for higher-rate tax relief, there’s good news. HMRC allows you to backdate claims for up to four previous tax years, provided you were eligible during those periods.

Here’s what to keep in mind:

You must have been a higher or additional rate taxpayer in the year you’re claiming for
Your pension contributions must have been made to a Relief at Source pension
You didn’t already receive full tax relief through your employer or payroll

To make a backdated claim:

If you filed a self assessment for that year, amend the return
If not, you can write to HMRC or use the new online tool
Include your National Insurance number, contribution details, and pension provider info

You can still claim for the following tax years in 2025/26:

2021/22
2022/23
2023/24
2024/25

Acting quickly is important, as once the four-year limit passes, those entitlements are lost. So if you’ve made qualifying contributions in recent years, now is the time to claim your missed tax relief.

What If You Have a Workplace Pension?

Workplace pensions can either make claiming higher-rate tax relief unnecessary or create a need to act, depending on how your scheme is set up. Understanding how your employer handles your contributions is the key to knowing if you’re owed anything.

There are three common workplace pension setups:

Net Pay Arrangement: Contributions are taken from your salary before tax. You automatically receive full tax relief based on your income level. No claim needed.
Relief at Source: Employer deducts contributions after tax. You get 20% relief automatically, but must claim any extra relief yourself.
Salary Sacrifice: Your salary is reduced, and the employer contributes that amount into your pension. Full tax and NI savings are built in.

Not all employees know which scheme they’re in. It’s a good idea to ask your HR department or pension provider how your contributions are handled. If it’s Relief at Source, you’re likely missing out on additional tax relief unless you’ve taken steps to claim it yourself.

What Happens After You Submit Your Claim?

After you’ve submitted your claim for higher rate tax relief, either through self assessment or the online tool, HMRC will begin processing it. The timeframe can vary, but typically claims are resolved within a few weeks.

Here’s what to expect:

HMRC will verify your income and pension contribution details
If needed, they may request additional documents, such as provider statements
Once confirmed, they’ll issue your refund or update your tax code

There are three ways you may receive your additional relief:

Tax rebate directly into your bank account
Reduced tax bill when self assessment is submitted
Adjustment in the tax code for future monthly pay packets

No matter which method applies to your situation, the outcome is the same: more money in your hands or less tax deducted from your salary moving forward. It’s a simple step that can offer real savings over time.

Are There Any Tax Relief Limits or Allowances?

While tax relief on pensions can be generous, it does come with some limits. Exceeding these can trigger tax charges, so it’s important to understand how much you can contribute while still enjoying tax benefits.

The key limits include:

Annual Allowance: You can contribute up to £60,000 per tax year and receive tax relief, or 100% of your earnings if lower
Tapered Annual Allowance: If you earn over £260,000, your annual allowance may be reduced
Money Purchase Annual Allowance (MPAA): If you’ve accessed pension savings, this reduces your limit to £10,000
Relevant UK Earnings: You can only receive tax relief on contributions up to your actual UK earnings

Tax relief is applied to your gross contributions, including the 20% added by your provider. It’s important to track how much you and others contribute each year to avoid breaching your limits.

Being aware of these thresholds helps you avoid unexpected tax bills and ensures you’re maximising your tax efficiency without overstepping the rules.

Is It Worth the Effort to Claim Pension Tax Relief?

Absolutely. Claiming your higher rate tax relief is not just a smart financial move, it’s money you’re legally entitled to. Too many higher earners in the UK unknowingly leave thousands unclaimed simply because they didn’t know they had to take action.

Benefits of claiming include:

Immediate tax savings either as a refund or lower tax bills
Faster pension growth with higher contributions from the same net income
Improved retirement prospects without any extra effort

Even if it takes a bit of time to gather the necessary details, the return is well worth it. Whether you’re owed £50 or £5,000, that’s money you can put toward your future or use now.

With new tools available through HMRC, claiming has never been easier. Don’t delay. If you’re eligible, act today and make your money work harder for you.

Conclusion

Navigating pension tax relief doesn’t have to be complex. If you earn above the basic income tax threshold and contribute to a qualifying pension, you could be entitled to more tax relief than you’re currently receiving.

Many people overlook this benefit simply because it’s not automatic. But the reality is, claiming your higher rate tax relief can significantly improve your financial wellbeing, both now and in the future.

The steps are straightforward, and the rewards are substantial. Whether you prefer claiming via self assessment or using the online HMRC tool, the outcome remains the same, more of your money back where it belongs. Take control of your pension tax relief today and secure the long-term financial advantage you deserve.