Pension Tax Relief for 40% Taxpayers 2026/27
If you pay tax at 40%, you get 40% pension relief 1 — but your provider only claims 20% automatically. The extra 20% is yours to claim, and it doesn't turn up on its own. Here's how to get it.
- Pay 40% tax and you're owed 40% relief — but the provider hands over only 20% automatically. 1
- Claim the extra 20% through Self Assessment or a PAYE code change; a £10,000 gross contribution is worth £2,000 back. 3
- You pay 40% on income above £50,270 in 2026/27 (England, Wales and NI). 2
- Only the part of a contribution sitting against higher-rate income gets 40% — HMRC does the split for you. 1
- Net pay and salary sacrifice already give 40% through payroll; a missed claim can be backdated four years. 3
How 40% pension relief works: the two-step process
Under relief at source, used by all SIPPs, most personal pensions and many workplace schemes, your provider claims 20% basic-rate relief from HMRC automatically. Every £800 you pay in becomes £1,000 in your pension. That is step one. It happens without you doing anything.
Step two: if you pay 40% tax on any part of your income, you are owed an extra 20% on your contributions. HMRC does not pay it automatically. You must claim it through your Self Assessment return or a PAYE code adjustment.
| Gross contribution into the pension | £10,000 |
| What David pays in (net, 80%) | £8,000 |
| Basic-rate relief added by the provider (20%) | £2,000 |
| Extra higher-rate relief claimed via Self Assessment (20%) | £2,000 |
| Total relief (40%) | £4,000 |
| Real net cost of £10,000 in the pension | £6,000 |
The 2026/27 higher-rate threshold
You pay 40% tax on earnings above £50,270 in 2026/27 (England, Wales and Northern Ireland). 2 The higher-rate band runs to £125,140. Above that, the additional rate of 45% applies.
Only the part of your contributions that falls against higher-rate income gets 40% relief. If your income is £55,000 and you contribute £10,000 gross, only £4,730 is in the 40% band. The remaining £5,270 gets 20%. Total relief: (40% × £4,730) + (20% × £5,270) = £1,892 + £1,054 = £2,946.
In practice, you just enter the full gross contribution on your SA return. HMRC calculates the split.
Claiming the extra 20%: step by step
- Get your gross contribution figure, your SIPP or pension provider's annual statement shows this. It is the total in the pension including their top-up (not the net amount you paid).
- File a Self Assessment return for 2026/27 (deadline: 31 January 2028 online). In the pensions section, enter the gross relief-at-source contributions.
- HMRC extends your basic-rate band by the gross contribution, taxing less of your income at 40% and reducing your tax bill accordingly.
- Alternatively, call HMRC (0300 200 3300) to request a PAYE code adjustment, relief is then delivered via your monthly payslip.
You can back-claim up to four previous tax years. As of May 2026, that means 2022/23 through 2025/26.
What if your scheme uses net pay arrangement?
Net pay arrangement (NPA) workplace pensions deduct contributions before income tax is calculated. That delivers 40% relief automatically through payroll. If you are in an NPA scheme, there is nothing to claim. Check your payslip: if the pension contribution reduces your taxable pay, it is NPA.
Salary sacrifice also delivers relief at your marginal rate automatically, plus saves employee National Insurance. Neither NPA nor salary sacrifice needs a Self Assessment claim for the pension element.
Contribution amounts and relief at different income levels
| Gross contribution | Basic relief (provider) | Extra to claim (40%) | Total relief | Net cost |
|---|---|---|---|---|
| £3,000 | £600 | £600 | £1,200 | £1,800 |
| £5,000 | £1,000 | £1,000 | £2,000 | £3,000 |
| £10,000 | £2,000 | £2,000 | £4,000 | £6,000 |
| £15,000 | £3,000 | £3,000 | £6,000 | £9,000 |
| £20,000 | £4,000 | £4,000 | £8,000 | £12,000 |
Assumes full higher-rate (40%) taxpayer with sufficient income above £50,270 to absorb the full contribution.
Enter your income and contribution to see the exact relief you are owed.
Open the calculator →Frequently asked questions
Does my pension provider claim any relief for me automatically?
Under relief at source, yes, 20% basic-rate relief is claimed automatically and added to your pension pot. You only need to claim the extra 20% (or 25% for 45% taxpayers) yourself.
I haven't claimed in previous years, can I back-claim?
Yes. You can claim for the four most recent tax years. As of 2026, this means 2022/23, 2023/24, 2024/25 and 2025/26. File late SA returns or write to HMRC with the gross contribution figures for each year.
What if my income is above £100,000?
Between £100,000 and £125,140, the personal allowance is withdrawn, creating an effective 60% marginal rate. Pension contributions reduce adjusted net income, potentially restoring your personal allowance, making contributions in this band exceptionally tax-efficient. See our over £100k guide.
Does salary sacrifice also give 40% relief?
Yes, and more, because it also saves employee National Insurance (8% main rate). Under salary sacrifice, a 40% taxpayer saves 40% income tax plus 8% NI on the sacrificed amount, versus just 40% income tax under relief at source. Salary sacrifice is available from employers who operate it; it cannot be used with a personal SIPP.
Sources & references
- Pension tax relief — GOV.UK
- Income Tax rates and Personal Allowances — GOV.UK
- Self Assessment tax returns — GOV.UK
Every headline figure above is checked against the official GOV.UK / HMRC guidance listed here for the 2026/27 tax year. Links open on GOV.UK.
Related guides: How to claim higher rate relief · Pension relief and Self Assessment · Pension relief over £100k · 45% additional rate relief
Disclaimer: This guide is for general information only and does not constitute financial or tax advice. Figures are for 2026/27 England, Wales and Northern Ireland rates. Consult a qualified financial adviser or HMRC for personalised guidance.