Tax relief benefits

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Tax relief helps your pension grow.

One of the best things about saving into a workplace pension is tax relief. For every 80p you contribute to your Nest pension, we’ll claim 20p from the government on your behalf and add this extra money to your pension pot - if you’re eligible.

On top of tax relief, there are many other reasons why saving into a workplace pension like Nest can be a good idea.

How does it work?

The tax relief we claim for you is set at 20%, which is the basic rate of tax you pay on your earnings. Instead of this money going to the government, it goes into your pension pot for you and grows over time.

As tax relief is worked out as a percentage, the more you contribute the more we can claim back for you.

Do I need to do anything?

For most people, you won't need to do a thing. We'll reclaim all the tax relief that's due to you and add it to your pot.

To claim additional tax relief you'll need to include details of your personal pension contributions on your self assessment tax return. You can then choose to receive this directly from HMRC or have your tax code amended.

When will the money appear in my Nest account?

We have to claim the relief from HMRC, which means there's usually a delay before you're able to see the extra money in your account. You should see it added to your Nest pension pot within three months.

Do I get tax relief on everything I pay into my Nest pension?

Tax relief applies to the contributions you make from your salary as well as any additional payment you make to top up your pot. It doesn't apply to employer contributions. That means the more you contribute, the more tax relief you benefit, but you won't get a corresponding increase in employer contributions.

Is tax relief the same as the 25% tax-free allowance?

No, these are different benefits. The 25% tax-free allowance applies to anything you withdraw from your pension pot. Remember, you can only access your savings after you turn 55. This is rising to 57 from 2028.

Income tax rates

All eligible taxpayers get 20% tax relief on their contributions. If you're a higher rate taxpayer, you can get additional tax relief - but you must apply for it through HMRC. This additional tax relief goes straight to you rather than being paid into your pot.

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