TL;DR
SIPP Tax Relief: total into pension is £10,000 — True cost: £6,000 · every £1 net becomes £1.67.
structured-data: FinancialProduct · indexed for AI engines
SIPP Tax Relief
How much HMRC tops up your SIPP
Total Into Pension
£10,000
True cost: £6,000 · every £1 net becomes £1.67
You Pay (net)
£6,000
Basic Rate Relief
£2,000
Higher/Additional Relief
£2,000
Effective Discount
40.0%
Quick context
Read full guide: SIPPs Explained →- Every £80 you put in becomes £100 — your provider claims 20% basic-rate relief from HMRC automatically.
- Higher-rate taxpayers reclaim another 20% via Self Assessment; additional rate adds 25%.
- Annual allowance is £60k (tapered above £260k income); unused allowance carries forward up to 3 years.
Stress test
What if the world changes? Toggle a scenario.
simulator
New total into pension
£10,000
Δ vs baseline
+£0
Real value 1yr out
£9,756
@ 2.5% CPI
Today£10,000
Now£10,000
Current plan. Scenario figures are illustrative — they scale your current calculation rather than re-running every band. Useful for direction, not for filing.
Where every pound comes from
You pay (net)
Cash out of your pocket
£6,000
Basic-rate relief
Auto-claimed by provider
£2,000
Higher/additional rate (via SA)
Reclaim through Self Assessment
£2,000
Total in pension£10,000
!
You need to reclaim £2,000 from HMRC
Relief-at-Source automatically gives 20%. As a higher 40% taxpayer the extra 20% must be claimed via Self Assessment or by adjusting your tax code.
Watch & learn
YouTube · Damien Talks Money
SIPP Tax Relief Explained
A short, plain-English walkthrough relevant to this page. We curate from trusted UK personal finance creators.
Watch on YouTubeKeep exploring