You have spare cash. This compares putting it in a pension, an ISA, or leaving it in savings — projected forward and taxed correctly at both ends.
On the figures so far
The pension wins: £10,000 becomes £34,825 after tax, against £26,533 in an ISA.
Every figure came from you, and the gap is £16,763 — well outside rounding.
Refine it in 7 questions below.
The decision
The pension wins: £10,000 becomes £34,825 after tax, against £26,533 in an ISA.
£16,763 better than ordinary savings or a taxable account, on the same figures.
Each of these has to be true. Where your answers settle it we have said so; where they cannot, the test is yours to check.
You are under 75 and UK resident. — we cannot tell from your answers
FA 2004 s. 188
Your personal contributions this year are no more than your UK relevant earnings. — met, on your answers
FA 2004 s. 190
The contribution is within your annual allowance, including anything carried forward. — met, on your answers
FA 2004 ss. 227–228
You have not flexibly accessed a defined contribution pension. — met, on your answers
FA 2004 s. 227ZA — the Money Purchase Annual Allowance
You accept that the money is locked until the normal minimum pension age. — we cannot tell from your answers
FA 2004 s. 279
This is information, not tax or financial advice. It shows how the rules apply to the figures you entered — it does not know the rest of your circumstances. Worth checking with an accountant before you act.
Rates as at 6 April 2026 — the 2026/27 tax year.
The figures above are only as good as what sits behind them. These are the records HMRC would ask for.
| When | What | If you miss it |
|---|---|---|
| 5 April | The contribution must reach the scheme to count for this tax year. | It falls into next year. Unused annual allowance carries forward three years; relevant earnings do not carry forward at all. |
| 5 April, four years after the tax year | Claim higher-rate relief for an earlier year you missed. | The claim is out of time and the relief is lost permanently. This is the single most commonly unclaimed relief in the UK. |
| 31 January after the tax year | Claim higher or additional-rate relief on the Self Assessment return. | You can still claim by writing to HMRC within the four-year window, but not through the return. |
| Four years after the year the allowance arose | Use carried-forward annual allowance before it expires. | The unused allowance simply drops off — it is use-it-or-lose-it on a rolling basis. |
Relief at source adds 20% automatically and you claim the rest; net pay takes the contribution before tax so all the relief is already given; salary sacrifice reduces your gross pay and saves National Insurance too. Only relief at source needs a claim.
£60,000 for most people, tapered above £260,000 of adjusted income. Add unused allowance from the three previous years, oldest first, if you were a scheme member in them.
www.gov.uk/guidance/check-if-you-have-unused-annual-allowances-on-your-pension-savings
A single contribution before 5 April is as effective as a regular one. Ask the provider to confirm the date received, not the date sent.
Higher-rate and additional-rate relief is not automatic under relief at source. Put the gross figure in the 'payments to registered pension schemes' box on the return, or write to HMRC if you do not file one.
www.gov.uk/guidance/self-assessment-tax-return-tax-relief-on-pension-contributions
Four years are in time. A letter to HMRC with the gross contributions per year and the scheme's confirmation is enough — no return is needed for the earlier years.
Three situations, worked through. They use the same rules as the tool above, so you can check the arithmetic against a case near your own.
At the basic rate the pension and an ISA are close: the same 20% is given now and paid later, and the only real gain is the 25% tax-free cash. The lock-up matters more than the tax here.
The classic case. £1,000 of the relief is only given if you ask for it, and most people never do — which is why unclaimed higher-rate relief is the largest single leak we find.
Inside the taper the contribution buys back the personal allowance as well as the tax, so the effective rate is 60%. This is the highest rate of relief available to anyone in the UK system.
Every figure above comes from one of these. Where we have interpreted rather than calculated, the tool says so.
Relief is given at your marginal rate, limited to the higher of your relevant UK earnings and £3,600 gross.
The annual allowance is £60,000, tapered by £1 for every £2 of adjusted income above £260,000, to a floor of £10,000.
Unused annual allowance can be carried forward three tax years, provided you were a member of a registered scheme in them.
The personal allowance is withdrawn at £1 for every £2 of adjusted net income above £100,000; a pension contribution reduces adjusted net income.
Up to 25% of the pot can normally be taken tax free, capped by the lump sum allowance.
Flexibly accessing a money purchase pension triggers a £10,000 annual allowance and ends carry-forward.
It depends on the gap between your tax rate now and in retirement. A higher-rate taxpayer expecting to be a basic-rate pensioner gets relief at 40% and pays about 15% on the way out once the tax-free cash is counted — a large, structural gain. A basic-rate taxpayer expecting to stay basic rate gains mainly the tax-free cash. The ISA wins on access, always.
Look at your tax return for the year: the box for payments to registered pension schemes should show the gross contribution. If it is blank and your scheme uses relief at source, the extra 20% was never claimed. Four years are still in time.
The income tax relief is the same, but sacrifice also removes the contribution from National Insurance — 8% for most employees and 15% for the employer, which many employers pass on. It is generally the most efficient route where an employer offers it.
Yes, £3,600 gross a year — £2,880 net — with relief added even though there is no tax to relieve. It is the one case where relief exceeds tax paid, and it applies to children and non-earning spouses.
Two separate limits, and the lower one binds. Relief is capped at your earnings; the allowance caps total input from all sources including your employer. A director with a £12,570 salary and a £40,000 company contribution is fine on both, because the employer contribution is not limited by personal earnings.
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