Online Calculators since 2009
You pay Income Tax on your earnings before any pension contribution, but the pension provider claims tax back from the government at the basic rate of 20 per cent.
In practice, this means that for every £8.00 you pay into your pension, you end up with £10.00 in your pension pot.
If you pay tax at higher rate, you can claim the difference through your tax return or by telephoning or writing to HMRC. If you're an additional rate taxpayer you'll have to claim the difference through your tax return.