The money you save into most workplace pensions has already been taxed (pesky income tax!). But the government has a deal which means your pension provider can claim back the money you’ve paid in income tax if it goes straight into your pension. So instead of that money disappearing in a tax bill, it gets put in your pension for future you! 🏝
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Here’s the maths part– pension providers will claim back at the basic income tax rate (20%), which actually means that whatever you save into your pension gets a 25% top up. For example, if you save £100 into your pension, the government adds £25. 🤑
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You can get tax relief on private pension contributions worth up to 100% of your annual earnings. Contributions per year are capped at 100% of your annual earnings or £40,000, whichever is lower.* Non-taxpayers can make pension contributions of up to £2,880 a year and still receive standard tax relief.

There aren’t many places you can put money to get a boost like that. It’s all part of a big government plan to encourage people to save for retirement – and frankly, it’s pretty great.
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Winner winner 🐔 🍽

*If you earn above £240,000/year your allowance may be lower.