Individual pension contributions: Consider making one before 5th April.

Personal pension contributions will attract tax relief at the individual’s marginal (top) rate of tax. This can be achieved via an employer pension scheme or a personal pension arrangement.

Timing your contributions

Contributions will need to be made before 5th April 2023 to achieve the tax relief in this tax year.

Limited tax relief

You can contribute up to your entire annual earnings, within your annual allowance, into a pension scheme personally and achieve tax relief on the contribution. For example, if your total earnings are £20,000, you would only achieve tax relief on a pension contribution up to £20,000.

Example

A higher rate taxpayer would obtain tax relief at 40%, so the net cost of every £100 contributed into their pension would be £60.

If your income is between £100,000 and £125,140, making personal pension contributions will re-instate your Personal Allowance and result in an effective tax relief of 60%.

Child Benefit

If you or your partner earn over £50,000 and are claiming child benefit, you may have to pay the High Income Child Benefit Charge. By using salary sacrifice or pension contributions (and/or charitable donations), you may be able to bring your income below these limits.