Yes. NOW: Pensions operates a net pay scheme, so your contributions come out of your pay before income tax is taken off. So if you’re a taxpayer, you automatically get full tax relief – you don’t pay any income tax on the money you contribute to your pension. However, if you don’t pay any tax you don’t automatically get tax relief.
Although the government is taking steps to address this, NOW: Pensions wants to make sure non-taxpayers don’t miss out, so we have our own tax top-up scheme. If you haven’t paid tax on any of your UK earnings, we promise to top up your pension savings by the amount of tax relief you’ve missed out each tax year.
You can do this at the end of each year. Just fill in our tax top-up scheme form.
You can contribute up to 100% of your salary towards your pension savings and still get tax relief, as long as the combined contributions from you and your employer are below the annual allowance. This applies to all the pension schemes you’re actively saving into, including our Scheme and any personal pensions you have.
From 6 April 2023 the allowance increased from £40,000 to £60,000.
The annual allowance could reduce to £10,000 a year if you start taking retirement benefits but also carry on saving into a pension. This reduced annual allowance is called the money purchase annual allowance.
See What is the money purchase annual allowance for pension contributions? for more information.