Tax relief lets you save more into your pension by reducing the income tax you pay on your pension contributions. With Cushon workplace pensions, your pension contributions are taken from your gross pay (your pay before tax is deducted).

 

This means you get automatic pension tax relief at your highest tax rate. If you are a basic rate taxpayer, you get 20% tax relief. If you are a higher or additional rate taxpayer, you get the first 20% tax relief automatically. To claim any extra tax relief above 20%, you need to do this through your Self Assessment tax return.

 

For example: If you pay £1,000 into your workplace pension from your gross pay, you do not pay income tax on this £1,000. The pension tax relief is not added to your pension pot. Instead, you pay less tax on your earnings. You don’t need to do anything extra to get basic rate tax relief. If you pay higher or additional rates of tax, you may need to claim the extra tax relief yourself.