Could you power up your pension with a single contribution?

To make good use of the benefits your pension plan provides, you may think about paying in a one-off pension contribution if your budget allows.

Going above and beyond your regular pension contributions could get you closer to achieving your pension savings goals. A pension is one of the most tax-efficient ways to save for your future. So let’s have a look at how you could give it a boost.

What is a single contribution into your pension?

A single contribution is a one-off pension contribution that can be made at any time. The government encourages pension saving, like a single contribution, by giving tax incentives known as tax relief.

Tax relief benefits

You can take advantage of tax relief and help your pension savings grow with a single contribution. For example if you pay basic rate tax:

If you pay a higher or additional rate of income tax you could benefit from additional tax relief. If you’re in a workplace scheme and your employer takes your pension contribution before you pay tax, then you won’t need to do anything. But if you pay into an individual pension or a workplace pension and your contribution is taken after tax has been paid then you’ll need to claim the difference between basic-rate tax and the amount of tax you pay from HM Revenue & Customs (HMRC).

The amount of tax relief you get depends on the amount of income tax you pay. The rates of tax in the UK are different depending on where you live in the UK. Tax relief also depends on your individual circumstances.

Make the most of your allowances

There's a limit to how much you can pay into your pension every year without a tax charge applying. This is called the annual allowance. For the 2024/25 tax year it’s £60,000, although if you have used up this year’s annual allowance, any unused annual allowance from the three tax years before this tax year can be carried forward to the present tax year to boost the amount of annual allowance available. But if you are an employee then you would still need to have the earnings to make a large contribution. For example, to pay in £60,000 you would need to be earning £60,000.

If you haven’t used up your annual allowance for the current or the last three tax years, you can pay more into your pension with a single contribution. There are other limits that might apply to you, visit our tax year end information to find out more.

Find out more about single contributions

Any single contributions you make are added to your pension pot and invested to help them grow, helping you save more for your retirement. While your savings could grow, their value can also go down, as investment returns aren’t guaranteed. This means you could get back less than you put into your plan.

Depending on the type of plan you have, you can make a single contribution using our online form. If you have a workplace pension plan and you want to exchange a bonus for a pension contribution, your employer may be able to help with next steps.

Giving your savings an extra boost

In addition to tax relief from the government, we aim to give your pension savings an extra boost by adding a share of our profits to your plan each year. So if we do well, so do you. We’ve called this ProfitShare.

We can't guarantee we'll be able to award ProfitShare every year. If we do, we add your ProfitShare award to your plan in April and invest it in the same investment choice as your other retirement savings. You can take the value of it with the rest of your pension savings any time after age 55. This will increase to age 57 from April 2028. You can see the value of your ProfitShare account in your yearly statement, by logging into online service, or by downloading our mobile app. ProfitShare doesn't count as a contribution, so it doesn't affect your annual allowance and the contributions you can make to your plan each year.

Find out more about how it works, how you qualify and what to expect from ProfitShare.