Halfway through the tax year: Are you maximising your pension potential?

With six months to go until the end of the tax year, here are some steps you can take to make the most of your pension – and avoid last-minute decisions.

October marks the halfway point of the 2026/27 tax year so now is a great time to check in on your retirement savings progress and ensure that you’re making the most of your annual pension benefits. 

We’ll take a look at how tax relief on pension contributions works in practice, and what the annual allowance means for you.

Why a mid-year pension check matters

The tax year ends on 5 April 2027, meaning you have just under six months to make the most of your pension benefits for this year.  

That gives you plenty of time to assess where you’re at, without the need to rush to make changes.

After all, when it comes to your pension, proactive steps are better than reactive decisions.

Understanding pension tax relief

Simply put, tax relief is a top-up from the government on any pension contributions you make until you turn 75. The way you receive your tax relief can differ:

• Relief at source: Your provider automatically claims back the 20% basic-rate tax relief from the government and adds it to your pension pot.

Let’s say you want to put £100 into your pension. Basic-rate taxpayers would only need to contribute £80 directly, and the government would add the extra £20 in the form of tax relief. Higher-rate taxpayers can claim extra tax relief from the government.

• Net pay: Your pension contributions are deducted from your salary before tax is applied, lowering the income tax you need to pay.

As a basic-rate taxpayer, contributing £100 to your pension would only reduce your take-home pay by £80, as you would save £20 in income tax (20% of £100) through tax relief. 

Higher- and additional-rate payers receive further tax relief automatically – they don’t need to make a manual claim through the government.

Are you making the most of your annual allowance?

Using your annual allowance can be a powerful way to set money aside for the future. 

Most people are entitled to tax relief on annual pension contributions up to 100% of their earnings or £60,000 – whichever is lower.

If you have a defined contribution pension:
• You can personally contribute up to the value of your annual earnings or less

• The total amount contributed – including by you, your employer, and through tax relief – should not exceed £60,000

• The annual allowance applies across all of your private pensions
Some higher earners have a lower annual allowance – learn more about the tapered annual allowance.

And, if you’ve already started taking your pension flexibly, different rules apply – learn more about the money purchase annual allowance (MPAA).

Could you carry forward your annual allowance?
If you exceed your annual allowance, you usually need to pay tax on the excess amount. 

However, if you have any unused tax allowance from the past three tax years, and you were a member of a registered pension scheme during that time, you may be able to carry that unused allowance forward. 

This would either reduce or remove the excess tax payment on this year’s contributions.

Check your employer contributions

At a minimum, most employers are required to contribute the equivalent of 3% of your qualifying earnings into your pension. But did you know that some employers are willing to pay in more than the minimum amount?  

Some companies offer higher pension contributions as an employee benefit, while others will match a percentage of additional contributions you make.

If employer contributions are available under your scheme, this could increase the amount being paid into your pension without increasing the overall cost to you.

Track your progress

By regularly reviewing your workplace pension contributions, you can check whether you’re making the most of your tax benefits and entitlements. If you’re a Standard Life customer, you can do this by logging into your online account

Frequent checks can also help you understand if you’re on track for the lifestyle you want in retirement. That way, you’ll know whether you need to make any adjustments.

You may want to consider whether you can afford to increase the amount you set aside, either through regular contributions or as a one-off top up. The changes you make don’t necessarily have to be major – even small increases could make a big difference over time, thanks to the long-term impact of investment growth and compounding.

Six months left: What actions could you take?

So, now that we’re into the second half of the tax year, what steps can you take to make the most of your allowance? 

1. Review your retirement goals: Do your plans for retirement still align with your long-term savings objectives?

2. Check your annual allowance usage: Have you made the most of the pension tax relief available through your annual allowance?

3. Review your current contributions: Understand how much you're currently contributing to your pension each month.

4. Consider increasing your contributions: If it's affordable for you, increasing your pension contributions could help you stay on track to meet your retirement goals.

5. Make any changes before the tax year end: The current tax year ends on 5 April 2027. Allowing yourself plenty of time can help you avoid making rushed decisions.

Easy next steps

With six months remaining, there’s still plenty of time to take meaningful action before the end of the tax year.

Reviewing your pension now could help you make the most of your available tax benefits, stay on track for retirement, and avoid a last-minute rush as the tax year end deadline approaches.

A simple next step is to log into your Standard Life account. From there you can check your current contributions and explore whether increasing them could be right for you.

For more information, head to the MoneyPlus homepage to read more about pension tax relief and annual allowances.

The information here is based on our understanding in October 2026 and shouldn’t be taken as financial advice.

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.

A pension plan is an investment. Its value can go down as well as up and could be worth less than was paid in.