What Higher Earners Need To Know About Pension Tax Relief in the UK

Thousands of workers are unknowingly missing out on pension tax relief in the UK, losing hundreds or even thousands of pounds in potential savings. The issue mostly affects those earning over £50,270, where relief above the basic 20% isn’t applied automatically—especially in relief-at-source pension schemes.

Despite HMRC pension tax relief changes introduced through a new online claims portal in 2025, many higher-rate and additional-rate taxpayers remain unaware they must claim the extra relief themselves. This has led to an estimated hundreds of millions going unclaimed each year.

If you’re a higher earner who doesn’t file a self-assessment return, or you’re unsure how your pension scheme applies tax relief, you could be leaving money on the table.

At Apex Accountants, we break down what’s changed, who’s affected, and how to claim pension tax relief efficiently and accurately—with expert support every step of the way.

Why Are Higher Earners Missing Out on Tax Relief?

If you’re a basic-rate taxpayer (20%), your pension contributions usually receive tax relief automatically. But if you pay tax at 40% or 45%, only part of your relief is automatic. You must claim the rest yourself—and many don’t.

This oversight continues despite HMRC pension tax relief changes that aimed to simplify the process. People in relief-at-source pension schemes often encounter this issue, mistakenly believing they have already received full relief.

What Changed in 2025?

In early 2025, HMRC introduced a new online service to make it easier to claim higher-rate and additional-rate pension tax relief.

The new system allows:

• Online claims without needing to file a self-assessment return
• Faster processing of relief claims
• Backdating claims for up to four previous tax years

This means you can now recover missed relief more easily—even if you’re not registered for self-assessment.

What you need to know about pension tax relief in the UK

Pension tax relief allows you to claim back the income tax you’ve already paid on your contributions.

Here’s how it works for different taxpayers:

Basic-rate taxpayer:

• Pay in £80
• HMRC adds £20 (20%)
• The pension pot receives £100
• No extra claim needed

Higher-rate taxpayer (40%):

• Pay in £80
• HMRC adds £20 automatically
• You can claim an extra £20 from HMRC
• Total tax relief = £40

Additional-rate taxpayer (45%):

• Same £80 payment
• £20 added automatically
• Claim an extra £25
• Total tax relief = £45

Am I Eligible to Claim Extra Pension Tax Relief?

You may be missing relief if:

• You earn over £50,270
• Your pension scheme operates under relief at source
• You do not use salary sacrifice or net pay arrangements
• You don’t file a self-assessment return
• You haven’t claimed for the past four years

Even if your employer contributes to your pension, it’s your responsibility to check if full tax relief has been claimed.

How to Claim the Extra Tax Relief

There are three main ways to claim:

1. HMRC Online Service

Launched in 2025, this service allows you to claim tax relief directly without needing a tax return. You need a Government Gateway account to access it.

2. Self-Assessment Tax Return

If you have already completed a self-assessment return, enter your gross pension contributions. HMRC will calculate and apply the additional relief.

3. Through a Tax Adviser

Apex Accountants can review your pension arrangements, check for missed years, and submit claims on your behalf. We can also optimise your pension contributions going forward.

Knowing how to claim pension tax relief correctly is key to avoiding long-term financial loss—especially if you’ve never reviewed your scheme’s treatment of higher-rate contributions.

How Much Could You Be Losing?

Let’s look at a common scenario:

Sam earns £55,000 and contributes £5,000 a year into a relief-at-source pension.

• £1,000 is added automatically (20%)
• She can claim another £1,000 (20%)
• If unclaimed, that’s a loss of £1,000 per year
• Over four years: £4,000 lost

This issue affects thousands of higher earners across the UK.

How Far Back Can I Claim?

HMRC allows you to backdate claims for up to four previous tax years, in addition to the current one.

In the 2025/26 tax year, you can claim for:

• 2021/22
• 2022/23
• 2023/24
• 2024/25
• 2025/26 (current year)

You must act quickly—once a tax year passes the four-year mark, you lose the right to claim.

What Types of Pension Schemes Require a Claim?

You usually need to claim relief if you’re contributing to:

• Personal pensions or SIPPs
• Stakeholder pensions
• Any scheme using relief at source

You don’t usually need to claim if you use:

• Salary sacrifice
• Net pay arrangements through your employer

Check your payslip or ask your HR team if you’re unsure.

Why Choose Apex Accountants

At Apex Accountants, we help higher earners across the UK claim missed pension tax relief with ease and accuracy.

We review your pension contributions, identify gaps in relief, and handle backdated claims for up to four years. Whether through HMRC’s new online portal or your self-assessment, we manage the full process on your behalf.

You’ll also receive tailored advice on:

• Salary sacrifice and employer contributions
• Tax-efficient contribution planning
• Relief-at-source vs net pay scheme impact

We provide trusted advice and work seamlessly with clients across the UK. Get in touch today to reclaim your pension tax relief and plan smarter for retirement.