How to Claim Your 40% Pension Tax Relief (Complete Guide 2025)

If you earn over £50,270 and pay into a workplace pension, there's a good chance HMRC owes you money. Thousands of pounds, in fact.

This isn't a loophole or a grey area. It's a legitimate tax relief that most higher-rate taxpayers simply don't know about.

What is Higher Rate Pension Tax Relief?

When you contribute to a "Relief at Source" pension (like NEST, The People's Pension, or most workplace schemes), your pension provider automatically claims 20% basic-rate tax relief from HMRC on your behalf.

But if you're a higher-rate taxpayer (earning over £50,270), you're entitled to 40% relief on your pension contributions. That extra 20%? You have to claim it yourself.

Most people don't.

Who is Eligible?

You're likely eligible if you tick all three boxes:

• You earn over £50,270 per year (higher-rate taxpayer)
• You contribute to a Relief at Source pension scheme
• You don't already claim this relief through Self Assessment

Not sure if your pension is Relief at Source? Check your payslip. If your pension contribution is taken after tax is calculated, you're almost certainly in a RAS scheme.

How Much Could You Claim?

The amount depends on your salary and contribution rate. Here are some examples:

Earning £60,000, contributing 5%:

• Annual contribution: £3,000
• Extra relief owed: £600 per year
• Over 4 years: £2,400

Earning £80,000, contributing 5%:

• Annual contribution: £4,000
• Extra relief owed: £800 per year
• Over 4 years: £3,200

Earning £100,000, contributing 8%:

• Annual contribution: £8,000
• Extra relief owed: £1,600 per year
• Over 4 years: £6,400

How Far Back Can You Claim?

You can claim for the current tax year plus the four previous tax years.

In 2025/26, that means you can claim for:

• 2021/22 (deadline: April 2026)
• 2022/23
• 2023/24
• 2024/25
• 2025/26

The oldest year drops off each April, so don't wait too long.

How to Claim: Your Options

Option 1: Self Assessment

If you already file a Self Assessment tax return, you can include your pension contributions there. This is the simplest route if you're already in the system.

Option 2: Write to HMRC

You can write to HMRC directly with details of your contributions. They'll adjust your tax code or send a refund. This works, but requires you to calculate everything yourself and write a formal letter.

Option 3: Use a Claim Preparation Service

Services like PensionReclaim generate all the paperwork for you - personalised letters, calculations for each tax year, and step-by-step instructions. You review, sign, and post. HMRC processes the rest.

What Happens After You Claim?

HMRC typically processes claims within 8-12 weeks. They'll either:

• Send a cheque to your address, or
• Pay directly into your bank account (if you provide details), or
• Adjust your tax code for future years

Common Questions

Is this legitimate? Yes. This relief is established under Section 192 of the Finance Act 2004. It's documented in HMRC's own guidance.

Why doesn't my employer sort this out? Your employer handles payroll, not your personal tax affairs. They have no way of knowing your total income or other tax reliefs you might be entitled to.

What if I've changed jobs? You can still claim. You'll just need contribution details from each employer's pension scheme.

Next Steps

Not sure if you're owed money? Use our free calculator to check your eligibility in under 2 minutes. It takes your salary, contribution rate, and years of employment to estimate your potential claim.

The average PensionReclaim customer claims back over £2,500. Some claim over £6,000.

Don't leave your money with HMRC.