The tax top-up scheme means you can get tax relief on money you pay in to your pension savings, even if you don’t earn enough to pay income tax.
How tax top-up works
now:pensions is a net pay arrangement. This means your pension contributions come out of your earnings before income tax is taken off. If you’re a taxpayer, you get automatic tax relief at your highest rate for that tax year. But if you don’t pay income tax, you don’t get tax relief.
Until January 2025 now:pensions had a tax top-up scheme to make sure members who didn’t earn enough to pay income tax didn’t miss out. You could apply to us for a top-up. If you qualified, we made top-up payments directly in to your pension savings.
But we were the only net pay pension scheme to do this.
Our tax top-up campaign success
For a number of years we campaigned, in partnership with the Net Pay Action Group, for the government to make top-up payments to non-taxpaying members of net pay schemes. We’re delighted this has been successful.
The government tax top-up
The government will now give you a tax top-up if you’re paying in to a workplace net pay pension scheme, but don’t earn enough to pay income tax. This usually means you earn less than the personal income tax allowance, currently £12,570 a year.
HM Revenue and Customs (HMRC) will contact you if you qualify, and pay the money directly to you (not into your pension savings). These payments are expected to begin in 2026 for the 2024/25 tax year.