I understand for 20/21 the annual pension contribution limit is 100% of your salary or £40,000, and this effectively means that the total of your employer pension contributions + personal pension contributions + HMRC top ups cannot exceed this limit.

Does this include additional 25% tax relief given to higher rate taxpayers?

I understand this would be paid directly back to me in 21/22 so it's not really into my pension.

1 Answer 1


The limit is on your gross contribution, i.e. the total amount your pension scheme receives.

For employer contributions, no tax is ever charged and the gross contribution is just that amount.

For personal contributions, the contributions are normally made net of basic rate tax and your pension scheme then reclaims that. So if you send them £100, that corresponds to a gross contribution of £125, the £25 having come from HMRC.

As you say higher-rate taxpayers can then reclaim another £25 in their tax return, making the net cost to them £75. But the gross contribution is still £125, so you don't need to count that £25 "again".

  • 1
    So essentially you get £25 of tax back that you don't even have to put in your pension?
    – Dan
    Commented Apr 27, 2020 at 11:24
  • 4
    @Dan. Pretty much. What actually happened is HMRC took their £50 (higher rate tax) slice off your income. But then when you decide the income should actually go to your pension and the pension only claims £25 in relief... well the other £25 is still due to you. Pension contributions are a terrific deal for higher rate payers... make the most of them before they decide to change the rules.
    – timday
    Commented Apr 27, 2020 at 14:14

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