17 Days Until Your Pension Tax Relief Expires: The Year-End Checklist for 2025/26

Your pension annual allowance for 2025/26 is £60,000. This covers all contributions to all your pensions — your personal contributions, employer contributions, and any third-party contributions. The total across every scheme cannot exceed £60,000 without triggering a tax charge.

For most people, the practical limit is 100% of earnings. If you earn £45,000, you can contribute up to £45,000 to pensions (though few would want to). The £60,000 cap only binds if your earnings exceed that amount.

The relief works differently depending on your scheme type:

• Relief at source (most personal pensions and SIPPs): You pay £800, your provider claims £200 from HMRC, £1,000 goes into your pot. Higher-rate taxpayers claim the extra 20% (£200) through Self Assessment.
• Net pay (most workplace schemes): Contributions are deducted before tax, so relief is automatic at your marginal rate. Nothing to claim.

The critical mistake: assuming your employer's contributions use up your entire allowance. If your employer puts in £5,000 and you earn £80,000, you still have £55,000 of allowance available.

If you didn't use your full £60,000 allowance in 2022/23, 2023/24, or 2024/25, you can carry that unused amount forward and add it to this year's allowance. The carry forward rules require that you were a member of a registered pension scheme in each year you're carrying forward from.

The maximum carry forward from 2022/23 is the unused portion of that year's £40,000 allowance (the allowance increased to £60,000 from 2023/24). From 2023/24 and 2024/25, it's the unused portion of £60,000.

Example: You contributed £10,000 per year in employer and personal contributions for the past three years:

• 2022/23 unused: £40,000 - £10,000 = £30,000
• 2023/24 unused: £60,000 - £10,000 = £50,000
• 2024/25 unused: £60,000 - £10,000 = £50,000
• Total available in 2025/26: £60,000 + £130,000 = £190,000 (capped by earnings)

This is the last chance to use 2022/23 carry forward. After 5 April 2026, it's gone permanently. If you had a low-contribution year in 2022/23, this matters.

Use our pension calculator to model the impact of a lump-sum contribution.

This is where real money gets left on the table. If you contribute to a relief-at-source pension (most SIPPs and personal pensions), your provider only claims basic-rate relief at 20%. The difference between 20% and your marginal rate — an extra 20% for higher-rate taxpayers, 25% for additional-rate taxpayers — must be claimed through Self Assessment.

On a £20,000 gross contribution:

• Your provider claims £4,000 (20% basic relief) — you pay £16,000 in
• You claim an extra £4,000 through Self Assessment (higher rate) or £5,000 (additional rate)
• Net cost to you: £12,000 (higher rate) or £11,000 (additional rate)

If you don't file Self Assessment, you can claim by calling HMRC or writing to them. But the deadline for 2024/25 claims via Self Assessment is 31 January 2027 — and for 2025/26, it's January 2028. Don't wait that long. File early and get your money back sooner.

One subtlety: if you're in a net-pay workplace scheme, you're already getting full relief automatically. Check your payslip — if pension contributions are deducted before tax is calculated, you don't need to claim anything extra.

High earners face an additional restriction. If your threshold income exceeds £200,000 and your adjusted income exceeds £260,000, your annual allowance is tapered — reduced by £1 for every £2 of adjusted income above £260,000, down to a minimum of £10,000.

The taper catches more people than you'd expect. "Adjusted income" includes employer pension contributions, so someone earning £230,000 with £35,000 in employer contributions has an adjusted income of £265,000 — enough to trigger the taper.

At adjusted income of £360,000 or above, the allowance is just £10,000. Contributing more than your tapered allowance triggers a tax charge that can wipe out the benefit of the contribution entirely.

If you're anywhere near the taper threshold, get exact numbers before making a lump-sum contribution. The penalty for getting it wrong — the annual allowance charge at your marginal rate — is severe.

Week 1 (now to 26 March):

• Calculate your total pension contributions for 2025/26 so far — check payslips and SIPP statements
• Check carry-forward availability from 2022/23, 2023/24, and 2024/25
• If you're a higher-rate taxpayer with a relief-at-source pension, note the extra relief to claim on Self Assessment

Week 2 (26 March to 2 April):

• If making a lump-sum contribution, transfer the money to your SIPP or personal pension. Most providers need 3–5 working days to process
• Confirm with your employer if you want to make an additional voluntary contribution (AVC) through salary sacrifice — this saves National Insurance too
• If you're near the taper threshold, run the numbers with an accountant

Final days (2–5 April):

• Verify the contribution has been received and allocated to the 2025/26 tax year
• Keep records — you'll need them for your Self Assessment return

Salary sacrifice is worth a specific mention. If your employer offers it, contributing through salary sacrifice rather than from net pay saves both employee and employer National Insurance. On a £10,000 contribution, a higher-rate taxpayer saves an additional £200 in NI (2% on earnings above £50,270) on top of the income tax relief. See our analysis on pension carry forward: £220,000 of unused tax relief. See our analysis on maximising your £60,000 pension annual allowance.

With the ISA deadline also falling on 5 April, many people face a choice: pension or ISA? The answer depends on your age and tax rate.

Pension wins when:

• You're a higher or additional-rate taxpayer (40–45% relief going in)
• You won't need the money before age 57 (rising to 57 from 2028)
• You want to reduce your adjusted net income below £100,000 to reclaim the personal allowance (effective 60% relief in the £100,000–£125,140 band)

ISA wins when:

• You're a basic-rate taxpayer (only 20% pension relief, and you'll pay tax on the way out)
• You need access before pension age
• You've already maxed pension allowances

The pension's edge at higher rates is substantial. A 40% taxpayer putting £20,000 into a pension gets £8,000 in relief. The same £20,000 in an ISA gets no relief. Even accounting for income tax on pension withdrawals in retirement (likely at basic rate), the pension is mathematically superior for most higher-rate taxpayers. See our pensions hub for deeper analysis.

This article is for informational purposes only and does not constitute financial advice. You should seek independent financial advice before making any investment decisions.