Archive: 4th June 2026

Pension

Pension tax relief and allowances

Jun 4, 2026 by Terry Harris 0 Comments

Pensions remain one of the most tax-efficient ways to save for retirement, due to a range of tax reliefs and allowances that can help boost retirement savings.

One of the key advantages of private pension contributions is the availability of tax relief on pension contributions. Individuals can usually receive tax relief on pension contributions worth up to 100% of their annual earnings subject to an annual allowance. The tax relief effectively reduces the cost of saving into a pension. Basic rate taxpayers benefit from 20% tax relief, while higher rate taxpayers can claim 40% relief and additional rate taxpayers can receive 45% relief on their contributions.

The annual allowance is the maximum amount that can be contributed to pension schemes each tax year before an additional tax charge may arise. The standard annual allowance is currently £60,000 and applies across all of an individual's pension arrangements. In some circumstances it may be possible to contribute more by using the carry forward rules. This allows unused pension allowances from the previous three tax years to be carried forward, provided they made pension contributions during those years.

Pension savers can also benefit from tax-free withdrawals in retirement. Most people can usually take up to 25% of their pension savings as a tax-free lump sum, subject to a maximum lump sum allowance of £268,275. In certain circumstances, including certain death benefits and serious ill-health payments, a higher lump sum and death benefit allowance may apply.

Ensuring that you use all the tax benefits available to you can make a significant difference to the value of retirement savings over the long term.

Source:HM Revenue & Customs | 01-06-2026
Income Tax

A reminder to consider the Marriage Allowance

Jun 4, 2026 by Terry Harris 0 Comments

Many married couples and civil partners could be missing out on valuable tax savings available by claiming the Marriage Allowance. If your circumstances are suitable, this is a reminder to consider the Marriage Allowance, as a simple claim could reduce your tax bill by up to £252 during the 2026-27 tax year.

The Marriage Allowance allows a spouse or civil partner with income below their Personal Allowance to transfer £1,260 of that allowance to their partner. The standard Personal Allowance is £12,570 for the 2026-27 tax year. To qualify, the person receiving the transfer must normally be a basic-rate taxpayer and the higher-earning partner must also be a basic rate taxpayer. This generally means they have income between £12,571 and £50,270 during 2026-27. Different limits apply for Scottish taxpayers because of Scotland's separate Income Tax bands.

Although the transfer reduces the lower earner's Personal Allowance, the overall effect is usually beneficial for the couple as a whole. For many households, it provides an easy way to reduce the amount of Income Tax paid without making any changes to their working arrangements or income levels.

It is also worth remembering that claims can be backdated where eligibility existed in earlier years. Eligible couples can currently backdate a claim to 6 April 2022, which could result in a useful lump-sum repayment from HMRC.

Once a successful claim has been made, the allowance will usually continue automatically in future tax years unless it is cancelled or a change in circumstances affects eligibility. Couples whose income levels have changed recently may therefore wish to review whether they qualify and ensure they are not overlooking this tax-saving opportunity.

Source:HM Revenue & Customs | 01-06-2026