Relief at source (RAS)
The most common method of pension tax relief where you pay from taxed income, and the provider claims back 20% basic rate from HMRC automatically.
Under RAS, if you contribute £80, your provider adds £20 (the 20% basic rate reclaim) and puts £100 into your pot. Higher and additional rate taxpayers must claim the extra relief (20% or 25%) through self-assessment — it's NOT added automatically, and many higher-rate taxpayers forget to claim, losing hundreds or thousands of pounds per year.
The alternative is salary sacrifice, where contributions are taken from gross pay before tax. Salary sacrifice saves both income tax AND National Insurance, making it more efficient for most earners. Relief at source is the default for most personal pensions and SIPPs.
Estimates use 2026/27 tax rates. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.