Ad-hoc manual pension contributions to workplace pension and tax relief

ro1892

Not sure if this should be in this section or the pensions section as it kind of overlaps a bit so feel free to move if it is in the wrong place.

I want to max out my pension contributions for this tax year (2025-26) however the problem I have is I get a bonus at the end of March and my bonus amount won't be known until mid March (we have to select the percentage of bonus to sacrifice into pension by end of February).

I have a idea of a range of what the bonus could be, I'm therefore thinking to sacrifice a small amount of my bonus and make a manual payment to my pension to top it up to my allowance.

My pension contributions through the workplace are through salary sacrifice.

From the last 3 tax years I have £5k of unused pension allowance so believe my pension allowance for this tax year is £65k (however I've already paid £50k into it this tax year through salary sacrifice including employer contributions - this will include my regular salary for February and March 2026 that is yet to be paid but not my bonus).

The bonus amount is likely to be between 10k and 20k but could possibly be more. I obviously don't want to sacrifice an amount that would take me over the £65k allowance. I'm therefore thinking to sacrifice 50% of my bonus into salary (so lowest would mean 5k goes into my pension from bonus and highest 10k). If it's more than 10k there should still be a bit of wiggle room.

Then in March I will have somewhere between £55k and £60k depending on bonus amount.

The questions I have are:

1. How to work out the amount of manual payment I need to make? I understand for every £80 I pay in my pension company will automatically claim tax relief at 20% (so £20) and I will manually need to claim the other 20% on self assessment as I am a higher rate (40%) tax payer

If that is the case then in the scenario where I get a 10k bonus and therefore will have paid £55k pension via salary sacrifice, I will need to make a manual payment of £8000 to top my pension up to £65k (£8000 my payment plus £2000 tax relief at 20%)

If the bonus was 20k and therefore I have paid £60k into pension through salary sacrifice, I will need to make a manual payment of £4000 to top my pension up to £65k (£4000 my payment plus £1000 tax relief at 20%)

2. Am I right in thinking the extra 20% tax relief I claim on my self assessment (as a higher rate tax payer) is paid as cash to me (or effectively cash by HMRC adjusting my tax code accordingly) and does not get paid into the pension itself?

3. Are there any implications/rules around making manual payments when you pay your pension normally through salary sacrifice? i.e. there's nothing saying you can't make an ad-hoc manual contribution if you pay by salary sacrifice?

4. Does the fact I'm carrying over 5k of unused pension allowance from the previous 3 years impact anything?

zagfles

Have you checked your workplace pension will accept manual payments? If they do, you need to check whether they'll treat payments as RAS (relief at source) in which case 1. and 2. are correct. However they may want gross payments eg if they use "net pay" for employee (non sal sac) conts.

3. it's allowed if the pension company allow it

4. No, just keep records in case HMRC query it. You may get a letter from the pension company saying you've exceeded the AA but not a problem if you've got enough carry forwards.

NoMore

1. For relief at source contributions, correct.
2. Correct.
3. Your workplace pension may not deal with relief at source contributions as they normally expect salary sacrifice, so may not claim basic tax relief on your behalf. This can become a pain to explain to HMRC what's happened to get the correct amount of tax relief, as their default is that the basic tax relief will have been claimed by the pension. So I would check first how your pension would deal with a personal contribution.
4. No, as long as you have enough carry forward to cover your contribution this year.

Dazed_and_C0nfused

1. Why are you having to complete a Self Assessment return? Also, there is no "other 20%". The additional tax relief depends on your overall tax situation. It could be less than 20%, it could be a lot more than 20%. Being exactly 20% is possible but not always the case.

2. No, whatever extra relief is due is factored into your Self Assessment calculation, there is no separate payment of any sort. It might reduce your Self Assessment liability but leave you with something to pay. If the end result is a refund then this would be paid to you, it is never added to your pension and never given as a tax code adjustment.

NB. Tax code adjustments are possible for pension tax relief during the tax year but not once it ends.

3. Yes. If you normally sacrifice salary for employer contributions then you can run into problems if the pension company doesn't use the relief at source method. But if you have a genuine reason for filing a tax return that may be less of an issue than it has been for a number of other posters on here.

4. Yes, you need to keep your own records. But that's all.

ro1892

Thanks all for the replies.

It is a Scottish Widows workplace pension and I've checked and when I login I have an option to make a single manual payment through the website. When going through the screens it asks how much I want to add then states:

Amount you pay from your bank account: £8000

Tax relief: £2000

Total amount put in your pension £10000

The tax relief has a help icon that states:

Your pension provider claims tax relief for you and adds it to your pension. This is called 'relief at source'.

If you pay tax at a higher rate than 20% you may be entitled to claim additional relief by contacting HMRC.

I therefore think that I'm allowed to make manual payments and they treat them as relief at source meaning my points 1 and 2 in the original post are correct.

Dazed_and_C0nfused

Subject to whether you actually need to file a return or not.

But the payment being treated as relief at source will certainly make things simpler.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81897186#Comment_81897186

Yes that looks OK.

ro1892

https://forums.moneysavingexpert.com/discussion/comment/81896516#Comment_81896516

1. I was under the impression that if I was a higher rate tax payer the pension company would only claim back 20% tax relief and I would need to do a self assessment to claim anything more I am entitled to.

2. Thanks. I had assumed HMRC would just adjust my tax code accordingly but sounds like if the extra relief I claim means they owe me then they will pay me, otherwise but I could still potentially owe them when they factor the extra relief in my tax calculation.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81897197#Comment_81897197

Point 1 ) You do not need to do a self assessment, just for this reason. You just need to inform HMRC of your gross pension contribution( ignoring the salary sacrifice part of course) .

Point 2) It depends. Normally the first time you go through the process, they will pay you back any tax rebate due, once your automatic tax calculation is done ( around October (ish). Then they will assume you will make the same contribution in the next tax year and adjust your tax code so you pay less tax each monthin 26/27. However it seems they sometimes do not always do the latter point. You will need to keep an eye on your tax code for 26/27 and think about what you might do with one off pension contributions next year.

NoMore

Claim tax relief on your private pension payments - GOV.UK

You use this link to claim Pension tax relief if not doing SA.

DRS1

In case no-one has mentioned it there is an online form for claiming tax relief on your pension contributions if you don't otherwise do self assessment. You can find it here

Claim tax relief on your private pension payments - GOV.UK