Pension Contribution Calculator 2026/27
Updated for the 2026/27tax year · Last updated
Enter your income and pension contribution to see the tax relief you receive and the true net cost to you. A £5,000 contribution costs a higher-rate taxpayer significantly less than a basic-rate taxpayer once tax relief is applied.
Pension contributions benefit from income tax relief, which means the government effectively tops up every contribution you make. A basic-rate taxpayer contributing £100 to a personal pension only pays a net £80 — HMRC adds £20 back automatically. A higher-rate taxpayer who claims their additional relief through Self Assessment ends up contributing £100 at a net cost of just £60. This makes pension contributions one of the most tax-efficient uses of money available to UK residents.
For the 2026/27 tax year, the annual allowance — the maximum total pension input (employer plus employee contributions) that can benefit from tax relief in a single tax year — is £60,000. If you have unused annual allowance from the previous three tax years, carry-forward rules allow you to make larger one-off contributions. High earners with adjusted income above £260,000 may face a tapered annual allowance that reduces this limit significantly.
Pension contributions also have a secondary benefit for those with income near £100,000: contributions reduce your adjusted net income, which can preserve or restore your personal allowance. Because the personal allowance tapers by £1 for every £2 of income above £100,000 (creating a 60% effective marginal rate in that band), a pension contribution made into the £100,000–£125,140 band effectively attracts 60% relief — making it an exceptionally powerful planning tool.
Tax saving
£1,000
Net cost
£4,000
| Gross contribution | £5,000 |
| Tax relief at 20% | £1,000 |
| Net cost to you | £4,000 |
Annual allowance: £60,000 (2026/27)
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How this calculator works
The calculator determines the true net cost of your pension contribution by comparing your income tax liability with and without the contribution. The difference is the tax saving — the amount the government effectively contributes on top of your own money.
Net pay arrangement (most workplace pensions): Contributions are deducted before income tax is calculated, so you automatically receive relief at your marginal rate. A 5% contribution on a £40,000 salary reduces taxable income from £40,000 to £38,000, saving income tax on the £2,000 difference at 20% = £400. The pension receives the full £2,000; your take-home reduces by £2,000 minus the £400 tax saving = £1,600.
Relief at source (personal pensions and SIPPs): You contribute a net amount and HMRC adds 20% basic-rate tax relief automatically. If you are a higher or additional rate taxpayer, you claim the extra relief via your Self Assessment return. The end result is equivalent: the pension receives your gross contribution amount, and the tax saving matches your marginal rate.
The personal allowance taper effect: For income between £100,000 and £125,140, pension contributions produce an enhanced effective relief rate of up to 60%, because each pound contributed simultaneously reduces the tax at your marginal rate and restores a portion of your tapered personal allowance (which was otherwise lost at a 40% marginal cost). The calculator models this taper so you can see the outsized benefit of contributing in this income band.
Annual allowance: The calculator shows gross contribution figures. Always ensure your total pension input (employer plus employee) stays within the £60,000 annual allowance, or use carry-forward of unused allowance from prior years if making a larger contribution.