How tax relief works

Personal contributions are made net of basic-rate tax (20%). HMRC adds the 20% back into the SIPP automatically. Higher-rate (40%) and additional-rate (45%) taxpayers can reclaim the extra relief through Self Assessment or PAYE.

Annual allowance and carry forward

The standard annual allowance is £60,000 per tax year (or 100% of your relevant UK earnings if lower). Unused allowance from the previous three tax years can be carried forward provided you were a member of a UK-registered pension scheme during those years.

• Tax relief at your marginal rate up to £60,000 per year
• Carry-forward of unused allowance from the previous 3 years
• Tapered allowance for those with adjusted income above £260,000
• Money Purchase Annual Allowance (£10,000) if you've flexibly accessed a pension

Accessing your SIPP

From age 55 (57 from April 2028) you can take 25% of your pot as tax-free cash up to the Lump Sum Allowance of £268,275. The remainder is taxed as income when you take it via drawdown or UFPLS. From April 2027, unused pension funds will count toward your estate for Inheritance Tax.