HM Revenue and Customs (HMRC) has confirmed that tax relief on personal pension contributions stops when a pensioner reaches age 75, a rule that affects older state pensioners across the UK.
Under HMRC regulations, once a pensioner celebrates their 75th birthday, the Government no longer adds basic-rate tax relief to individual pension contributions. While it remains possible to continue contributing to some pensions beyond this age, many pension schemes refuse to accept new contributions after this point.
Tax relief rules before and after 75
Before turning 75, savers can receive tax relief on private pension contributions worth up to 100% of their annual earnings. This is typically applied automatically, although in some cases individuals may need to claim it themselves, depending on the type of pension scheme and the rate of Income Tax paid.
An annual allowance limits the amount that can be paid into a pension scheme each year before Income Tax must be paid. In 2026/27, the maximum stands at £60,000 per year. However, this only applies to UK residents under the age of 75, so those still employed on their 75th birthday lose basic-rate tax relief on any contributions made from that point onwards.
Impact on death benefits and inheritance
Reaching 75 also affects pension death benefits. If a pensioner dies after this age, beneficiaries are liable for Income Tax on these benefits at their marginal rate. If death occurs before 75, these benefits are typically exempt from Income Tax.
Confirming the rule in its guidance on pensions tax, HMRC said: "Although contributions can be paid after a member has reached the age of 75, they are not relievable pension contributions and cannot qualify for tax relief."
Oliver Griffin from Fidelity UK explained: "Once you turn 75, you no longer receive tax relief on personal pension contributions. For that reason, many pension schemes don't accept new contributions after this. If you happen to be working at 75, your employer can still pay into your pension - provided these contributions meet tax rules."
Changes from April 2027
Griffin also noted that from April 6, 2027, unused pension funds and certain death benefits will be included in the deceased's estate for inheritance tax (IHT) purposes. Currently, beneficiaries do not usually pay IHT on inherited pension wealth, but this will change.
He added: "Once you turn 75, you should still be able to take your pension's tax-free cash, however the rules can become more complicated and potentially less favourable. Some pension providers may not allow you to take tax-free cash after 75."
