NEST Pension Tax Relief: Are You Missing Out on Thousands?

NEST is the UK's largest workplace pension scheme, with over 13 million members. It's the default choice for thousands of employers running auto-enrolment.

But here's what NEST doesn't tell you: if you're a higher-rate taxpayer, you're almost certainly owed money by HMRC.

The NEST Tax Relief Problem

NEST operates as a "Relief at Source" pension scheme. This means your contributions are taken from your salary after tax, and NEST claims back 20% basic-rate tax relief from HMRC on your behalf.

That's great if you're a basic-rate taxpayer. But if you earn over £50,270, you pay 40% tax on your earnings above that threshold. You're entitled to 40% tax relief on your pension contributions, not just 20%.

That extra 20%? NEST doesn't claim it for you. Neither does your employer. Nobody does.

You have to claim it yourself. And most people don't even know it exists.

How Much Are NEST Members Missing Out On?

Let's look at some real numbers.

Example 1: Earning £55,000

• 5% pension contribution: £2,750/year
• NEST claims 20% relief: £550
• You're owed an extra 20%: £550/year
• Over 4 years: £2,200

Example 2: Earning £70,000

• 5% pension contribution: £3,500/year
• NEST claims 20% relief: £700
• You're owed an extra 20%: £700/year
• Over 4 years: £2,800

Example 3: Earning £90,000

• 8% pension contribution: £7,200/year
• NEST claims 20% relief: £1,440
• You're owed an extra 20%: £1,440/year
• Over 4 years: £5,760

These aren't edge cases. This is standard maths for anyone with a NEST pension earning over the higher-rate threshold.

Why Doesn't NEST Sort This Out?

NEST's job is to manage your pension investments. They're not a tax service, and they don't have visibility of your total earnings or tax situation.

Your employer handles payroll, but again, they're not responsible for your personal tax affairs. Many employers don't even realise this relief exists, let alone that their staff need to claim it separately.

HMRC knows you're owed money. But they won't proactively send it to you. Their position is that it's your responsibility to claim.

The result? Billions of pounds in unclaimed tax relief sitting with HMRC, belonging to people who have no idea they're entitled to it.

How to Check If You're Affected

You're likely owed money if all three of these apply:

1. You have a NEST pension (check your payslip or pension paperwork)
2. You earn over £50,270 (the higher-rate tax threshold for 2024/25)
3. You don't file Self Assessment (if you do, you should be claiming there)

If you're not sure whether you have a NEST pension, look for "NEST" or "National Employment Savings Trust" on your payslip or any pension correspondence. You can also check by logging into your NEST account at nestyourpension.org.uk.

How Far Back Can You Claim?

You can claim for the current tax year plus the previous four years. That's five years of potential refunds.

As of 2025/26, you can claim for:

• 2021/22 (deadline: April 2026 - don't miss this one)
• 2022/23
• 2023/24
• 2024/25
• 2025/26

Each April, the oldest year drops off. If you've been in NEST for several years and never claimed, you could be looking at thousands in backdated relief.

How to Claim Your NEST Pension Tax Relief

You have three options:

Option 1: Self Assessment

If you already file a Self Assessment tax return (for self-employment income, rental income, etc.), you can add your pension contributions to your return. This is the simplest method if you're already in the system.

Option 2: Write to HMRC Directly

You can write to HMRC with details of your NEST contributions for each tax year. They'll process your claim and either adjust your tax code or send a refund. This works, but you'll need to gather all the figures yourself and write a formal letter.

Option 3: Use a Claim Preparation Service

Services like PensionReclaim handle the paperwork for you. You provide your salary and contribution details, and receive personalised claim letters ready to sign and send. This is the fastest route if you want to avoid calculating everything yourself.

What Information Do You Need?

To make a claim, you'll need:

• Your salary for each tax year you're claiming
• Your pension contribution percentage or amounts
• Your National Insurance number
• Your address (for HMRC to send the refund)

You can find contribution details in your NEST online account or on your annual pension statements.

What Happens After You Claim?

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

• Send a cheque to your home address
• Pay directly into your bank account (if you provide bank details)
• Adjust your tax code to reduce future tax payments

For backdated claims covering multiple years, a cheque or bank transfer is most common.

Don't Leave Your Money with HMRC

If you've had a NEST pension while earning over £50,270, the odds are strong that HMRC owes you money. Not complicated tax planning money. Not loopholes. Just straightforward tax relief that's yours by law.

The average claim we see is over £2,500. Some are over £6,000.

Use our free calculator to check your eligibility in under two minutes. You'll see exactly how much you could be owed, with no obligation to proceed.