Introduction to this document

Pension premium record

Knowing how much has been contributed to your pension plan in any tax year is important so that you can calculate any higher or additional rate tax relief you’re entitled to and check that you’ve not exceeded the maximum for which tax relief is allowed (the annual allowance).

Keeping tabs on your contributions

For final salary pension schemes (also known as defined benefit schemes) the amount of contribution can only be calculated by the scheme administrator, but for money purchase schemes such as personal pension plans (also known as defined contribution schemes) the contribution is equal to the amount paid into the scheme.

What to record

All contributions paid to a pension scheme count towards the annual allowance (AA) (£50,000 for 2013/14 and £40,000 for later years). They can be paid by you, another person, e.g. a relative, or by your employer.

When you or another person pays into your pension plan tax relief at the basic rate (20%) is added by HMRC. For example, if you pay £80 HMRC will add £20 bringing the total to £100 (the gross contribution). This is the amount to record. If you contribute to a workplace pension through your salary your employer will deduct the contribution before working out tax on your pay (this is referred to as a net pay arrangement) so no further tax relief is due. However, you should still keep a record of the contribution. You can find the amount of contributions on your payslips.

Where your employer contributes directly to your pension fund no tax relief is added by HMRC. Therefore, the amount to record is the amount paid by your employer, who must tell you how much they’ve paid. This has become especially important since the introduction of auto-enrolment which requires all employers to contribute to pensions for all employees who belong to the workplace pension.

Tax relief

If you are a higher or additional rate taxpayer you can claim further relief on contributions to your pension plan paid personally or by another individual. This can be claimed either by reporting the premiums on your self-assessment tax return or, if you’re not required to complete one, by writing to HMRC.

Annual allowance

Where the total of all pension contributions exceeds the AA, you might be liable to an AA charge. This claws back the tax relief on the excess contributions.

Where all contributions to your pension are less than the AA for a year, the difference can be carried forward to any of the three following years and added to the AA for that year. You only carry forward unused AAs from a year if you had an active pension scheme in that year.


Ann starts a pension plan for the first time in 2016/17 and contributes £10,000; her employer contributes £2,000. This is repeated in 2017/18. Therefore, for each of those years Ann has unused AA of £28,000. In 2018/19 she receives a windfall and uses it to pay £60,000 (gross) into her pension plan. This exceeds her AA by £20,000 (£60,000 - £40,000). The unused relief from the earliest year (2016/17) of £28,000 is used to cover the £20,000. If necessary the remaining £8,000 could be used to cover excess contributions for 2019/20, but not later.

Note. If you have drawn money from one or more of your money purchase pension funds on or after 6 April 2015 using pensions freedom (also known as flexible pensions) a special AA applies (the money purchase annual allowance). This is £10,000 for 2016/17 and £4,000 for 2017/18 and later years. Unused money purchase AAs from one year cannot be carried forward and used in later years.

How do I use the record?

The Pension Premium Record allows you to go through your payslips and bank statements and record the amount of each type of contribution for every month of the tax year. You can then give this to your accountant - or use it to help complete your own tax return.