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 |
Frequently Asked Questions
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Who Pays Pension Contributions?
Employees pay a percentage of their salary into their workplace pension, employers must pay at least the minimum, and the government adds tax relief on top. Many people also add to a personal pension or SIPP. Together these contributions build up your retirement savings over time. We can help you check that the right contributions are being made through your payroll.
What Is the Annual Allowance?
The annual allowance is the most you can pay into all your pensions in a tax year with tax relief, and it is £60,000. Contributions above it may face an Income Tax charge. Unused allowance can be carried forward for three years, which can help if you want to make a larger contribution in one year. We can review your position and work out how much you can contribute without a charge.
How Do I Get Tax Relief?
Basic rate relief is usually added to your pension automatically. Higher and additional rate taxpayers may claim the rest through Self Assessment. Personal tax relief applies to the higher of £3,600 gross or 100% of your earnings. We can prepare your return so that any extra relief you are due is claimed correctly.
What are the Automatic Enrolment Contribution Minimums?
Employers must automatically enrol eligible jobholders into a qualifying workplace pension. The minimum employer contribution is 3% and the minimum total contribution is 8%. The earnings trigger is £10,000, and contributions are calculated on the qualifying earnings band, which runs from £6,240 to £50,270. We can set up and manage your automatic enrolment duties through payroll.
What Happens If my Pension Contributions Go Above the Allowance?
Contributions above the £60,000 annual allowance may trigger an Income Tax charge. The limit may fall to £10,000 once money purchase pensions have been accessed. For higher earners, the allowance is tapered, reducing by £1 for every £2 of income above £260,000, to a minimum of £10,000. If you think you may exceed your allowance, it is worth checking before you make a large contribution.
Can Unused Pension Allowance be carried forward?
Yes. Unused annual allowance can be carried forward for three years, so you may be able to contribute more than £60,000 in a single year if you have unused allowance from earlier years. You must usually have been a member of a pension scheme in those years. We can check your allowance history and help you plan a larger contribution.
Do Employers Get Tax Relief on Pension Contributions?
Yes. Employers get tax relief on contributions paid wholly and exclusively for the purposes of the trade. This means employer contributions are normally an allowable business expense. We can make sure your pension costs are treated correctly in your accounts and tax return.
How Much Is the State Pension and How do I Qualify?
The full new State Pension needs 35 qualifying National Insurance years, with a minimum of 10. For 2026/27, the new State Pension is £241.30 a week (£230.25 in 2025/26), and the basic State Pension for a single person is £184.90 a week (£176.45 in 2025/26). Checking your National Insurance record helps you see whether you are on track. We can help you review it and consider filling any gaps.