See how changing your contribution % affects your monthly take-home and retirement pot — with tax relief and employer matching built in.
Your Details
£
%
Your current % of salary into pension
%
What you want to increase to
%
Employer's contribution % (fixed)
yrs
—
Real monthly cost to you
—
Extra into pension/yr
—
Extra pot at retirement
Current
Monthly gross—
Your pension (mo)—
Employer pension (mo)—
Total to pension (mo)—
Monthly take-home—
After increase
Monthly gross—
Your pension (mo)—
Employer pension (mo)—
Total to pension (mo)—
Monthly take-home—
Annual Allowance Used— / £60,000
How Pension Tax Relief Reduces Your Real Cost
Pension contributions are one of the most tax-efficient ways to save in the UK. When you contribute more to your pension, the government tops it up through tax relief — meaning the actual cost to your take-home pay is much less than the headline contribution amount.
The real cost by tax band
Tax Band
Extra £100 into pension
Take-home cost
Tax relief
Basic rate (20%)
£100
£80
£20
Higher rate (40%)
£100
£60
£40
Additional rate (45%)
£100
£55
£45
Salary sacrifice vs relief at source
Salary sacrifice reduces your contractual salary, so you pay less National Insurance as well as income tax. A basic-rate taxpayer contributing via salary sacrifice saves an additional 8% in NI — so a £100 pension contribution costs only ~£72 net. Your employer also saves employer NI (15% above £5,000), and some pass this saving back into your pension.
Relief at source is contributed from net pay and topped up with basic-rate tax relief automatically. Higher and additional rate taxpayers must claim extra relief through Self Assessment.
Employer matching — free money
Many employers match contributions up to a cap. Claiming the full employer match is almost always the best financial decision available — it's an immediate 100% return on your own contribution (before tax relief). Always check your scheme rules before changing your contribution.
The power of compounding over time
An extra £100/month into your pension at 30, growing at 6%, adds roughly £100,000 to your pot by age 67 (pre-charges). At 40, the same extra £100 adds roughly £50,000. Starting earlier matters — but it's never too late to increase contributions.
Sarah, 32
£38,000 salary — raises contribution 5% → 8%
Extra to pension (mo)£95
Take-home cost (mo)£76
Extra pot at 67~£113,000
Mark, 45
£65,000 salary (higher rate) — raises 5% → 10%
Extra to pension (mo)£271
Take-home cost (mo)£163
Extra pot at 67~£131,000
Frequently Asked Questions
Pension contributions attract tax relief at your marginal rate. A basic-rate taxpayer contributing £100 extra per month sees their take-home fall by only £80 — the government adds £20. A higher-rate taxpayer sees take-home fall by only £60, with £40 in total relief. The calculator shows the exact take-home impact for your situation.
The annual allowance is £60,000 (or 100% of earnings, whichever is lower). This is the combined total of your contributions and your employer's. Exceeding it triggers a tax charge at your marginal rate on the excess. Most employees are well within the limit — the bar above shows how much of your allowance the new contribution would use.
Yes — salary sacrifice reduces both income tax and National Insurance contributions. A basic-rate taxpayer making a £100 pension contribution via salary sacrifice saves ~£28 in combined tax and NI, versus £20 via relief at source. The NI saving on salary sacrifice is the key difference.
Income over £100,000 causes the Personal Allowance to taper — losing £1 of allowance for every £2 earned above £100,000. This creates an effective 60% marginal tax rate between £100,000 and £125,140. Pension contributions reduce your "adjusted net income," restoring your allowance. A £10,000 pension contribution for someone earning £110,000 could save over £6,000 in tax — a 60% effective relief rate.
A common rule of thumb: half your age when you start as a total % (you + employer). Starting at 30 → aim for 15% total. The auto-enrolment minimum is 8% combined. For a comfortable retirement income of ~£30,000/year, most projections suggest a combined contribution of 12–15% of salary from age 30. Use the Pension Calculator to model your specific target.