Estimate your SIPP pension growth, government tax relief top-ups, and claimable higher-rate tax rebates.
When you save into a Self-Invested Personal Pension (SIPP) in the UK, the government rewards your retirement planning by adding tax relief to your contributions. This relief acts like a match to restore the income tax you would have otherwise paid.
The tax relief corresponds directly with your marginal tax bracket:
As a basic rate taxpayer, your contribution gets topped up by 20% basic tax relief. Your SIPP provider automatically claims this from HMRC. To put £100 into your SIPP, you only need to pay in £80. The government will deposit the remaining £20 directly into the SIPP.
Higher rate taxpayers are entitled to 40% tax relief. Your SIPP provider automatically claims the basic 20% relief (raising an £80 net contribution to £100 gross). You then claim the extra 20% rebate via your annual Self Assessment tax return.
This means a £100 gross pension pot costs you an effective £60 net. The extra tax rebate is returned to you as cash, or reduces your overall tax bill.
Additional rate taxpayers get 45% tax relief. Similar to the higher rate, your provider claims 20% automatically, and you claim the remaining 25% through Self Assessment.
An effective £100 gross contribution inside the SIPP only costs you £55 net in cash after all rebates.
For tax-relieved pension contributions, the annual limit (the SIPP Annual Allowance) is the lower of 100% of your relevant UK earnings or £60,000.
If you have no salary (e.g. not working), you can still pay in up to £2,880 net (£3,600 gross) and get the basic 20% relief top-up from the government.