Tax Year-End Checklist: Your Pension Allowance

The 2025/26 tax year ends on 5th April 2026 and once the clock hits midnight, many valuable pension allowances and tax-saving opportunities are gone for good. Whether you’re employed, self-employed, or running your own limited company, acting before the tax year ends could mean:

• More money invested in your pension
• Less paid to HMRC
• A healthier long-term financial future

This guide walks you through exactly what to check and what to do before 5th April, so you don’t leave tax relief on the table.

Your tax year-end pension checklist

Before the end of the tax year, consider whether you can:

1. Maximise your annual pension allowance
2. Use unused allowances from previous years
3. Claim higher or additional-rate pension tax relief
4. Protect or reclaim your Personal Allowance
5. Reduce or avoid the Child Benefit tax charge
6. Add a bonus to your pension tax-efficiently
7. Contribute to a spouse or partner’s pension
8. Pay into a Junior SIPP for your children
9. Fill gaps in your State Pension record
10. Review your pension beneficiaries

Let’s break each one down.

Maximise your pension annual allowance

For the 2025/26 tax year, most people can contribute up to £60,000 into their pension (or 100% of their earnings, if lower) and still benefit from tax relief. If you’re a basic-rate taxpayer, your pension provider automatically claims 20% tax relief for you. That means:

• You pay £48,000
• HMRC tops it up to £60,000

Higher earners may be subject to the tapered annual allowance, but many people can still contribute significantly more than they expect.

👉 Learn more: How much can I pay into my pension?

Carry forward unused allowances

If you haven’t used your full pension allowance in the previous three tax years, you may be able to carry forward unused allowance and make a much larger contribution this year.

⚠️ Important: After 5th April 2026, any unused allowance from the 2022/23 tax year will expire.

This makes tax year end a crucial deadline if you’re planning a large one-off contribution.

👉 Read more: How pension carry forward works

Claim higher and additional-rate pension tax relief

If your income exceeds £50,270, you’re entitled to extra pension tax relief and many people miss out simply because it isn’t automatic. Example:

• You contribute £10,000 to your pension
• Your provider claims £2,500 basic-rate relief
• You can claim up to £2,500 more back in cash from HMRC

This extra relief doesn’t go into your pension – it comes straight back to you via Self Assessment or by contacting HMRC directly

👉 Step-by-step guide: How to claim higher-rate pension tax relief

Protect your personal allowance (income over £100,000)

If you earn over £100,000, your tax-free Personal Allowance starts to taper away at a rate of £1 lost for every £2 earned above this level. This creates an effective tax rate of up to 60%. Pension contributions reduce your adjusted net income, which can:

• Restore your Personal Allowance
• Dramatically cut your tax bill

For many high earners, this is one of the most powerful tax-saving strategies available.

👉 Read more: How to Avoid the 60% Tax Trap

Reduce or avoid the child benefit tax charge

The High Income Child Benefit Charge (HICBC) applies if one parent earns over £60,000.

For the 2025/26 tax year the charge starts at £60,000 and Child Benefit is fully clawed back at £80,000. Pension contributions reduce your income for Child Benefit calculations meaning you could

• Keep more (or all) of your Child Benefit
• Grow your pension at the same time

👉 Full explanation: How to avoid the Child Benefit tax charge

Add your bonus to your pension

If you’re due a bonus before 5th April 2026, you may be able to ask your employer to pay it directly into your pension. This can help you:

• Avoid Income Tax
• Save on National Insurance
• Increase the amount that actually ends up invested

In many cases, this is one of the most efficient ways to use a bonus.

👉 Learn more: Should you put your bonus into your pension?

Pay into a spouse or partner’s pension

You can contribute to someone else’s pension, including a spouse or partner. If they:

• Earn little or nothing, you can still contribute £2,880 per year
• Which becomes £3,600 with tax relief

This is a popular way to build retirement savings more evenly and use allowances that might otherwise go unused

Contribute to a junior sipp

A Junior SIPP lets you invest for your child’s long-term future in an extremely tax-efficient way. You can contribute up to:

• £2,880 per child per tax year
• Topped up to £3,600 by the government

While the money is locked away until adulthood, starting early can make a powerful difference over time.

Boost your State Pension

To receive the full new State Pension, you typically need 35 qualifying years of National Insurance contributions. If you’ve:

• Taken time out of work
• Been self-employed with gaps
• Lived abroad

…it’s worth checking your NI record and considering voluntary contributions before the deadline.

👉 Check your record: National Insurance contributions

Review your pension beneficiaries

Pensions usually sit outside your estate and can often be passed on tax-efficiently. That only works if your beneficiary details are up to date.

Penfold customers can review or update beneficiaries anytime in the app or online – a quick check that can make a big difference later.

Company directors: a powerful tax-saving opportunity

If you run a limited company, employer pension contributions are one of the most tax-efficient ways to extract profits. They are:

• Deductible against corporation tax (19–25%)
• Free from National Insurance
• Not subject to dividend tax

For many directors, pensions beat dividends hands-down at tax year end.

👉 Learn more: Pensions for company directors

Your Tax Year-End Pension Checklist

To make the most of your SIPP allowance and pension allowance 2025/26 before 5th April, use this checklist:

1. Maximise Your Pension Contributions

Ensure you’ve contributed up to your £60,000 pension allowance 2025/26 (or as close as possible) before the tax year closes to fully benefit from tax relief.

2. Use Carry Forward to Boost Your Allowance

If you haven’t used your full pension allowance in the last three years, you may be able to carry forward unused allowance to increase your total contribution.

3. Consider SIPP Contributions

If you want investment choice and flexibility, contribute into your SIPP now, these contributions will count towards your SIPP allowance and total pension allowance 2025/26.

4. Plan for Higher Rate Tax Relief

Higher earners can benefit from extra tax relief on pension contributions, make sure your SIPP or other pension contributions are in place before the tax year ends.

Why It Matters

Failing to use your pension allowance 2025/26 or misjudging your SIPP allowance can mean losing valuable tax relief that won’t return until the next tax year. Planning early helps you:

• Reduce your taxable income
• Grow your retirement savings tax-efficiently
• Make the most of allowance carry forwards

Take action before 5th April to optimise your pension tax strategy and secure the full benefit of your available allowances.

Don’t miss the 5th April deadline

Once the tax year ends, unused allowances are gone forever. Taking action before 5th April 2026 could mean:

• Thousands more in your pension
• Thousands less paid in tax

Whether you’re topping up, catching up, or just checking you’re on track, now is the time to act.

Review your pension today and make the most of the 2025/26 tax year.