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
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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.
Written and reviewed by James Moorman, UKCalc Editor. James builds and maintains every calculator on UKCalc, published by Animateed Limited. About UKCalc · Editorial policy · Methodology
Last reviewed: 9 August 2026 · Rates: 2026/27 tax year unless stated otherwise.