How do I claim higher rate pension tax relief in the UK?

This guide explains how to claim higher rate pension tax relief in the UK including when relief is automatic, when you must claim, how to claim through Self Assessment or tax code updates and how to check past contributions.

Higher rate pension tax relief is one of the most valuable tax benefits available to UK taxpayers yet many people never receive all the relief they are entitled to. I speak to higher rate earners every week who assume their employer has handled it automatically or who do not realise their pension scheme requires them to make a claim themselves. In my opinion this is one of the most overlooked areas of personal tax because the rules are simple but very rarely explained clearly.

This guide walks you through exactly how to claim higher rate pension tax relief in the UK. I explain how pension tax relief works, which pension types require a manual claim, how to claim through Self Assessment or PAYE, what HMRC needs from you, and how to check whether you have missed out on previous years.

First: how pension tax relief works

When you pay into a pension you receive tax relief at your highest rate of income tax. This means:

  • Basic rate taxpayers get 20 percent

  • Higher rate taxpayers get 40 percent

  • Additional rate taxpayers get 45 percent

However the system does not always give you this relief automatically. It depends on the method used by your pension scheme.

There are three main contribution methods:

  • Relief at source

  • Net pay arrangement

  • Salary sacrifice

Only the last two give full relief automatically.

In my opinion understanding which method your pension uses is the key to everything.

Step 1: Work out which pension method you use

This determines whether you must claim extra relief.

Method 1: Relief at source

You must claim higher rate relief yourself

Relief at source is used by:

  • SIPPs

  • Personal pensions

  • Stakeholder pensions

  • Many workplace group personal pensions

How it works

You pay your pension contribution from your net pay.
Your provider adds the basic 20 percent relief.
Higher rate relief is not added automatically.

Example

You pay £80. Your provider adds £20. Pension receives £100.

If you are a higher rate taxpayer you are entitled to another £20 which you must claim.

How to spot relief at source on your payslip

  • Your pension deduction appears after tax

  • Your taxable pay does not change

  • Your provider adds basic relief separately

If this is your scheme, you must claim.

Method 2: Net pay arrangement

Higher rate relief is automatic

Your contributions are deducted from your gross pay before tax is calculated.

Higher rate relief is automatic through PAYE. You do not need to claim.

Method 3: Salary sacrifice

Higher rate relief is automatic

You reduce your salary and your employer pays the sacrificed amount into your pension.

Because the income is never taxed you automatically receive full relief.

In my opinion salary sacrifice is the most tax efficient method for higher rate earners.

Step 2: Check whether you are a higher rate taxpayer

You are a higher rate taxpayer if your taxable income exceeds:

  • £50,270 in England

  • £43,662 in Scotland

You may also fall into higher rate tax temporarily due to a:

  • Bonus

  • Commission

  • Pay rise

  • Second job

  • Overtime spike

If you have paid higher rate tax at any point in the tax year you can claim relief on pension contributions for that year.

Step 3: Decide how you want to claim the extra relief

There are two ways to claim:

  • Through Self Assessment

  • By asking HMRC to update your tax code

Both are valid. One gives an immediate refund and the other spreads relief across future payslips.

Step 4: How to claim through Self Assessment

This is the most accurate method and is required if you already file a tax return.

What to include

You must report your gross pension contributions for the year.

Gross means:

Your net contribution + the 20 percent added by your provider.

Example

You pay £4,000 net
Provider adds £1,000
Your gross contribution is £5,000

You enter £5,000 on your tax return.

What happens next

HMRC calculates:

  • How much basic rate relief you already received

  • How much higher rate relief you are entitled to

  • How much to refund or adjust

You then receive:

  • A tax refund
    or

  • A reduced tax bill
    or

  • A new tax code with reduced tax deductions

Why I like this method

It is clean, accurate and gives you a full record of your relief.

Step 5: How to claim through your tax code (PAYE claim)

If you do not file a tax return you can still claim.

Method 1: Online through your Personal Tax Account

  • Log in online

  • Go to the section on pension contributions

  • Enter your estimated gross contributions for the year

  • HMRC updates your tax code

Method 2: Call HMRC

Provide your contribution details over the phone.

Method 3: Write to HMRC

Include your name, NI number, employer and contributions.

What happens next

HMRC adjusts your tax code. This reduces the tax deducted each month so you receive the extra relief gradually throughout the year.

In my opinion this method is best for people who prefer steady tax relief instead of a lump sum.

Step 6: How to check whether HMRC already gave you the relief

You can check your tax code.

Look for:

  • “RAS pension”

  • “Allowance for pension contributions”

If these appear your tax code already includes some relief.

I still recommend checking the amounts because estimates can be wrong.

Step 7: What if you contributed in previous years and never claimed?

You can claim for the past four tax years.

To reclaim past years

  • File or amend Self Assessment
    or

  • Write to HMRC explaining your contribution history

Information to provide

  • Dates and amounts of contributions

  • Whether they were net or gross

  • Pension provider details

  • Proof of contributions if HMRC requests it

Example

If you missed relief for four years and contributed £5,000 gross per year you could be owed up to £4,000 in refunds depending on your tax rate.

In my opinion many people are owed significant refunds from past years.

Step 8: Special situations where claiming is more complex

1. You have multiple jobs

You may pay higher rate tax overall even if neither employer sees you as a higher rate taxpayer individually. You must claim relief yourself.

2. You moved between basic and higher rate tax

You can still claim for months where you were a higher rate taxpayer.

3. You contributed to a SIPP and a workplace pension

You must total your gross contributions from all schemes.

4. You earn Scottish income

Your tax relief will be based on the Scottish bands. Rates differ from England but the process is the same.

How much extra relief can you get?

Example

You pay £500 a month net into your pension.
Your provider adds £125.
Your gross contribution is £625.
Higher rate relief: £125.
Yearly extra relief: £1,500.

If you do not claim, you lose the £1,500.

If you claimed through PAYE your tax code would be adjusted by £1,500 which increases your take-home pay.

In my opinion claims like this can make a meaningful difference to your finances.

Common mistakes people make

1. Thinking all workplace pensions give automatic relief

Many do not.

2. Not knowing their pension method

Payslips reveal this clearly.

3. Claiming the wrong amount

You must claim gross contributions not net.

4. Forgetting personal pensions

SIPPs nearly always require claiming.

5. Underestimating income

Your tax rate affects the amount of relief.

6. Waiting too long

You can only go back four tax years.

In my opinion checking once a year prevents all these issues.

Real world examples

Example 1: Missed relief for three years

James paid into a workplace relief at source scheme and earned £58,000. He never claimed higher rate relief and was owed £3,600 in refunds.

Example 2: Salary sacrifice

Amelia used salary sacrifice. She did not need to claim anything because all relief was automatic through PAYE.

Example 3: Bonus pushed her into higher rate tax

Maya was usually a basic rate taxpayer but a bonus moved her into higher rate tax for one year. She could claim relief on pension contributions from the bonus year.

Example 4: Switching jobs

George had two jobs. Neither employer knew he was a higher rate taxpayer. He claimed the extra relief through Self Assessment.

In my opinion: the key things you need to remember

If I had to summarise this topic simply it would be:

  1. Higher rate relief is automatic only for salary sacrifice and net pay schemes.

  2. Relief at source requires you to claim manually.

  3. Your payslip tells you which method you use.

  4. You can claim via Self Assessment or a tax code update.

  5. You can go back four tax years for missed relief.

  6. Checking once a year protects you from losing valuable relief.

In my opinion every higher rate taxpayer should check their pension contributions at least once a year.

Final thoughts

Claiming higher rate pension tax relief in the UK is straightforward once you know which pension method you are using. If your employer operates salary sacrifice or net pay arrangement you receive all your relief automatically and do not need to claim anything. If your pension uses relief at source you must claim the extra relief yourself either through Self Assessment or a tax code adjustment. HMRC will not give it automatically unless you tell them.

In my opinion this is one of the easiest ways to increase your take-home pay or reduce your tax bill each year. A quick review of your payslips and pension contributions can save you a significant amount of money over time.