📊 Annual Contributions Breakdown
Workplace Pension Explained
Under auto-enrolment, minimum contributions are 8% of qualifying earnings (employee 5% + employer 3%). Qualifying earnings for 2025/26 are between £6,240 and £50,270.
Tax relief: Your pension contributions receive tax relief at your marginal rate. A basic rate taxpayer gets 20% relief — meaning a £100 contribution only costs you £80 from your take-home pay.
Annual Allowance: You can contribute up to £60,000 per year (or 100% of earnings, whichever is lower) and receive tax relief. This was increased from £40,000 in .
For 2025/26, qualifying earnings are the portion of your salary between £6,240 and £50,270. Pension contributions are calculated on this band, not your full salary. So on a £35,000 salary, qualifying earnings are £28,760.
If your employer matches additional contributions, increasing yours is essentially free money. Even without matching, the tax relief makes pensions one of the most tax-efficient savings vehicles available. Consider using our Salary Sacrifice Calculator to see if sacrificing salary for pension saves even more.