HM Revenue and Customs (HMRC) has confirmed a tax charge that affects older individuals once they reach age 75. Under current rules, tax relief on individual pension contributions ceases when a pensioner turns 75. While it remains possible to pay into some pensions after this age, the government will no longer add basic-rate tax relief to these contributions. Consequently, many pension schemes do not accept new contributions after age 75.
Tax Relief Before Age 75
Before turning 75, individuals can receive tax relief on private pension contributions up to 100% of their annual earnings. This is typically applied automatically, but in some cases, depending on the pension scheme and Income Tax rate, individuals may need to claim it themselves.
Annual Allowance Limits
An annual allowance restricts the amount that can be paid into a pension scheme each year before Income Tax becomes payable. For the 2026/27 tax year, the maximum amount is £60,000 per year. However, this only applies to UK residents under the age of 75.
Implications After Age 75
If you are still working on your 75th birthday, the government does not add basic-rate tax relief on any pension contributions made from that point onward. While contributions can still be made if the provider accepts them, they lose the right to tax relief. HMRC's guidance on pensions tax states: "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."
Death Benefits Impact
Turning 75 also affects pension death benefits. If you die after this age, your beneficiaries must pay Income Tax on these benefits at their marginal rate. In contrast, if you die before 75, these benefits are typically free from Income Tax. This can significantly influence the amount left to your family from your pension.
Expert Insights
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. Age 75 is also important for death benefits. If someone dies under the age of 75, their beneficiaries do not, at the moment, generally have to pay income tax or inheritance tax (IHT) on inherited pension wealth. If someone dies aged 75 or over, beneficiaries normally pay income tax on money they receive from the pension but, currently, they do not usually pay IHT on that. However, from April 6, 2027, unused pension funds and certain death benefits will be included in the deceased's estate for IHT purposes."
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."
