What is tax relief?

Tax relief on pensions contributions means that pension savings receive favourable tax treatment, helping to increase the amount saved at retirement.

You can contribute as much as you wish to your pension, but limits apply to the amount of pension savings that can benefit from tax relief. The Lifetime Allowance was abolished from 6 April 2024 and replaced by other pension tax allowance. TPT Retirement Solutions needs your employer’s payroll to deduct your contributions from your gross pay.

Gross pay is the amount you earn before tax is deducted. This will be shown on your payslip. This means that your pay after the deduction of pension contributions will be lower and you will pay less tax (tax relief on your contributions). This is sometimes known as a Net Pay arrangement and for most members avoids the process of having to make a claim with HMRC. Employer contributions are paid in addition to your contributions, and you will not be required to pay tax or National Insurance on your employer’s contribution. For the majority of members this is a straightforward way to benefit from tax relief. Members who do not pay income tax may not benefit from tax relief under this arrangement. There is no limit on the amount that can be contributed to a pension scheme. However, the Annual Allowance limits the amount of pension savings that can normally benefit from tax advantages each tax year.