How does pensions and tax work please ?

[JaneKing75]

So I want to max out my pension, £20,000 a year ideally.
When I've done tax calculations entering the contribution from me not my employer it then say something about £10,000 being claimed back in tax. Is that automatic or something I need to action please ?

pension contributions are off the gross amount. so it reduces the taxable amount of salary

It will depend how your pension arrangement is set up. There’s two types. In a net pay scheme, your pension contributions are deducted from your salary before tax is calculated, so you just pay less tax in the first place. In a relief at source scheme, your pension contributions are deducted from your net pay (i.e. after tax has been deducted) and the tax relief then gets added back to your pension fund later. You will need to check with your pension administrator or employer which type you have.

I'd like this to be a private pension not related to my employment, i'm guessing the 2nd is my only option in that case ?
Thank you

Sorry, I was confused because you mentioned contributions from your employer! Yes, contributions into a private pension won’t be done through your salary, so will be paid from income that you have already been taxed in and HMRC will add the tax relief to your pension pot for you. I think the provider sorts this but you will need to check.

@ChessieFL

Sorry, I was confused because you mentioned contributions from your employer! Yes, contributions into a private pension won’t be done through your salary, so will be paid from income that you have already been taxed in and HMRC will add the tax relief to your pension pot for you. I think the provider sorts this but you will need to check.

And if you are a higher rate taxpayer, you need to claim the extra 20% on your own self assessment tax return. Only basic rate relief is given by HMRC to the pension scheme fund.

Ah thank you both, I do need to urgently do a self assessment !