How to Claim Higher and Additional Rate Pension Tax Relief

Putting money into your pension is one of the most tax-efficient things you can do. But if you earn over £50,270, there’s a good chance you’re not getting all the tax relief you’re entitled to. In fact, higher earners in the UK miss out on hundreds of millions of pounds in unclaimed pension tax relief every year, simply because it isn’t added automatically.

If you’re completing a Self Assessment tax return, this is one of the most common places people leave money on the table. This guide explains:

• how pension tax relief works
• who can claim extra relief
• how to claim it step by step, whether you’re employed, self-employed, or using Penfold

What is pension tax relief?

When you pay into a pension, the government gives you back the income tax you paid on that money in the form of tax relief up to the annual pension allowance of £60,000 (or 100% of your total earnings). It’s designed to encourage long-term saving, and it’s one of the most generous tax benefits available.

If you’re a basic-rate taxpayer (20%), your pension provider automatically claims this relief for you. That means:

• You pay £80 into your pension
• The government adds £20
• You get £100 in your pension pot

That’s a 25% boost from HMRC, without you needing to do anything.

But if you pay higher-rate (40%) or additional-rate (45%) tax, you’re entitled to more relief – and this is where many people miss out.

What is higher and additional rate pension tax relief?

If you pay income tax at 40% or 45% (or 42% and 47% in Scotland), you’re entitled to more than the standard 20% pension tax relief.

Only the first 20% is added automatically. The rest must be claimed manually, usually through Self Assessment.

Here’s what that means in practice:

• Higher-rate taxpayers (40%) can claim up to 40% total tax relief
  → £10,000 into your pension could cost as little as £6,000
• Additional-rate taxpayers (45%) can claim up to 45% total tax relief
  → £10,000 into your pension could cost as little as £5,500
• In Scotland, the rates are slightly different: 42% and 47%

That extra relief doesn’t disappear – but if you don’t claim it, you don’t get it.

Am I eligible to claim?

You can usually claim higher or additional rate pension tax relief if:

• you earn over £50,270 (or the Scottish equivalents), and
• you’ve made personal or employee pension contributions into a relief at source pension (such as Penfold, a SIPP, or Nest)

What if I have a workplace pension?

Many workplace pensions give you full tax relief automatically, but not all.

• Net pay or salary sacrifice: no action needed
• Relief at source: higher-rate relief must be claimed

If you’re unsure, check with your employer or pension provider which setup your scheme uses and whether your pension provider adds higher or additional rate tax relief automatically. If not, you may be able to claim money back if:

• you pay higher or additional rate Income Tax
• you pay higher or top rate Income Tax in Scotland

How does workplace pension tax relief work?

Relief at Source, if you're a higher/additional rate taxpayer, you'll need to claim the rest yourself (as above): Here, your employer deducts your pension contribution after tax and National Insurance have been taken from your pay. Your pension provider then adds tax relief to your pension pot at the basic tax rate, irrespective of your total earnings.

Net Pay Arrangement, no action needed: Your pension contributions are taken before tax. You get full relief immediately whether you are a basic, higher, or additional rate taxpayer.

Salary Sacrifice, no action needed: Your pension contributions are entirely paid by your employer and not subject to income tax. This arrangement means you have agreed to reduce part of your salary in exchange for a pension contribution made by your employer. Without salary sacrifice, this part of your salary would have been subjected to income tax and National Insurance. Instead, your employer contributes this amount to your pension, free of these taxes.

How much could I get back?

Let’s look at an example – Sam earns £53,000 wants to pay £5,000 into her pension:

• Her provider automatically adds £1,000 in basic-rate relief
• Her income above the higher-rate threshold (£50,270) is £2,730
• She can claim 20% extra relief on that portion = £546 back

That gives Sam:

• £1,000 basic-rate relief
• £546 higher-rate relief
• Total tax relief: £1,546

So £5,000 into her pension actually costs her £3,454.

If Sam earned £55,270 or more, she could claim the full 40% on the entire contribution, meaning £5,000 would cost just £3,000.

Rule of thumb: You can claim extra relief on pension contributions up to the amount of income you pay higher or additional rate tax on. On the other hand, if your pension contribution is more than the amount you earn above the higher rate tax band, only part of your contribution will be eligible for higher rate tax relief.

You can claim extra relief up to the amount of your income taxed at higher or additional-rate, anything beyond that would require further calculation.

How to claim higher or additional rate tax relief

There are now two ways to claim, depending on your situation.

Through your Self Assessment tax return (most common)

If you complete a Self Assessment tax return, this is where you claim higher-rate pension tax relief. This applies for the current tax year, and any previous years you’re claiming for:

• Go to the “Tax reliefs” section
• Enter your total gross pension contributions
  (what you paid + the 20% your provider added)

If you haven’t filed before, you can register and submit your return on GOV.UK. If your Self Assessment is more than 12 months late, you can still write to HMRC using our Tax Relief Reclaim Letter Template.

Using HMRC’s online claim tool

If you don’t normally file a tax return, HMRC now offers an online service for higher-rate and additional-rate taxpayers on GOV.UK. To be eligible, you must be paying into a personal or workplace pension scheme and be paying more than the basic rate of tax.

To claim tax relief using HMRC's online service, you'll need:

• Your National Insurance number
• The type of pension
• The name of your pension provider
• The net amount of pension contributions for each tax year
• Proof of payments from your pension provider
• Your payroll number or reference number

How to Claim: Sign in with your Government Gateway user ID and password (or create one if you don’t have an account). Fill in the required pension contribution details. Submit your claim (you can save progress and return to it later).

What happens after I claim?

Any extra tax relief you claim doesn’t have to go into your pension. You could get it as:

• A tax rebate (HMRC sends you money back)
• A reduction in your tax bill (your tax return shows you owe less)
• A change to your tax code, so you pay less tax in future months

No matter how it’s paid, it’s money back in your hands just for putting money into your pension. We call that a win-win.

What if I missed a year?

Made pension contributions in previous years but didn’t claim the higher-rate or additional-rate tax relief? All is not lost. You can backdate pension contributions for up to the last 4 tax years. That means for the 2025/26 tax year, you can claim for:

• 2022/23
• 2023/24
• 2024/25
• 2025/26

Claiming tax relief on pension contributions for previous years works in the same way as claiming for this tax year – you can do this via either of the methods outlined above.

Remember, you’ll only be able to claim for years in which you were a higher earner (earned over £50,270).

Claim it. Keep it. Grow your pension.

If you earn above the basic tax rate, pension tax relief is one of the most valuable, and most missed, tax benefits available.

Whether you’re owed £50 or £5,000, it’s worth checking. And if you’re with Penfold, your contribution records are already in one place, ready when you need them.

Log in, check your contributions, and make the claim. Future-you will thank you, and present-you might get a welcome rebate too.

Practical Tips for Maximising Pension Tax Relief

• Check your pension type – Penfold and other personal pensions use relief at source, so additional relief must be claimed manually.
• Keep records of contributions – HMRC may ask for statements if you’re claiming extra tax relief, especially now stricter evidence requirements are enforced.
• Plan ahead – tax relief on pension contributions can significantly reduce your overall tax bill and increase your long-term retirement savings.

Penfold Makes It Easier

If you use Penfold, we automatically claim basic rate pension tax relief and add it to your pension pot for you. You’ll have clear contribution records ready when it’s time to claim the higher-rate tax relief you’re entitled to from HMRC, whether via Self Assessment or the online tool.

Log in to check your contributions, review your statements, and make your claim, you could be owed a pension tax refund from HMRC worth hundreds, or even thousands of pounds.