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You asked: How does tax relief work on a pension?
The government will give you tax relief on the money you pay into your pension to the tune of 20%. That means for every £1 paid into your pension, you’ll pay 80p and the government will pay the other 20p. In other words, if you want make a contribution of £20 to your pension, you need only pay in £16 because the government will pay in £4 as tax relief.
Even if you don’t pay tax, you’ll get tax relief on your pension payments up to £2,880 a year. If you pay tax above the basic rate, you may be able to claim additional tax relief through your self-assessment.
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