The end of the tax year is creeping up fast - 5 April 2026 will be here before you know it. So now’s the perfect time to take action and give your pension a boost.
To make things a little easier, we’ve put together a simple checklist of four things to think about to help you make the most of your pension allowances before the new tax year kicks in.
1. Have you claimed all the tax relief you’re owed?
Most UK taxpayers can receive tax relief on personal and third party contributions up to 100% of your relevant earnings, capped at _annual_allowance per year (_current_tax_year_yyyy_yy). This means that the government effectively adds money to your pension pot. Maximising this allowance could make a big difference to your pension pot over time.
Most basic rate taxpayers usually get a 25% tax top up automatically added to pension contributions. If you’re a PensionBee customer, we’ll claim this tax top up on your behalf and add it directly to your PensionBee plan. Higher or additional rate taxpayers can claim further tax relief through a Self-Assessment tax return.
2. Could you increase your contributions?
Even a small increase in your monthly contributions can add up over time and the tax perks make it even sweeter.
Here’s an example:
- if you’re a basic rate taxpayer and you pay £100 a month into your pension (£1,200 a year), the government adds £25 for every £100 you put in meaning you get an extra £300 a year tax top up; and
- if you bumped your contribution up to £120 a month, that’s an extra £360 a year!
You can try out the PensionBee Tax Relief Calculator to see how an increase in contributions and tax relief can help grow your pot.
3. Make sure you understand the annual allowance
The annual allowance is the limit on the gross amount that can be saved into a pension each tax year without incurring tax charges. The current standard annual allowance for pension contributions is _annual_allowance (_current_tax_year_yyyy_yy) - this includes personal, employer and any third party contributions.
If you save more than the annual allowance into your pension, you’ll have to pay an ‘annual allowance charge‘. This is a tax on the amount you go over by. If you’re a high earner, remember that the annual allowance starts to taper down if both your adjusted income exceeds _adjusted_income and your threshold income exceeds _threshold_income. You can find out more on our Pensions Explained page.
It’s also worth noting that once you begin accessing your defined contribution pension flexibly, you may activate the money purchase annual allowance (MPAA), which permanently reduces your annual allowance. The MPAA is currently _money_purchase_annual_allowance for tax year _current_tax_year_yyyy_yy.
4. Consider using ‘carry forward’ for a lump sum contribution
Come into some extra cash - maybe from an inheritance, a bonus from your employer or a property sale? Maybe you’re set to exceed your annual pension contribution allowance for the current tax year? You could make a larger pension contribution by using the carry forward rule.
You can carry forward unused allowance from the previous three tax years - as long as you were a member of a registered pension scheme during those years. So if you haven’t maxed out your pension contributions over the last few years, you could potentially put in more than the annual allowance of _annual_allowance this tax year (_current_tax_year_yyyy_yy) without facing a tax charge. Bear in mind that you can only use carry forward to make tax-efficient contributions if you have enough relevant earnings in the tax year.
Make the most of your pension before the end of the tax year
Getting your pension in shape before the tax year ends isn’t just about ticking a box - it’s about making sure you’re setting yourself up for a more comfortable future. Whether you increase your contributions, claim that extra tax relief, or take advantage of the allowances, a little action now could mean a big difference down the line.
So why not take 10 minutes this week to check in on your pension? Future you will be thankful! Thinking about making an extra contribution before the end of the tax year? Complete your contribution before Thursday 2 April to ensure it counts towards the _current_tax_year_yyyy_yy tax year.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Period | Market Event | FTSE World TR GBP (%) | 4Plus Plan (%) |
|---|---|---|---|
4Plus Plan’s inception – 6 Sept 2013 | QE Tapering, China Interbank Crisis and its aftermath | -5.44 | -2.41 |
3 Oct 2014 – 15 May 2015 | Oil price drop, Eurozone deflation fears & Greek election outcome | -5.87 | -1.77 |
7 Jan 2016 – 14 Mar 2016 | China’s currency policy turmoil, collapse in oil prices and weak US activity | -7.26 | -1.54 |
15 June 2016 – 30 June 2016 | BREXIT referendum | -2.05 | -1.07 |
