Is debt advice really free?

Yes, with the charities and services listed above. They are funded so you do not have to pay. If a company asks for an up-front fee for advice, stop and check them against the Financial Conduct Authority's register first.

Will getting debt advice affect my credit score?

Talking to an adviser does not affect your credit file. Some solutions, such as a debt management plan or IVA, can be recorded on it. An adviser will explain the effects before you choose.

Will the adviser judge me?

No. Debt advisers help people from all walks of life, and what you tell them is confidential. Many people get into debt after a job loss, illness, relationship breakdown or a rise in living costs.

Does Sterlingsum give debt advice?

No. Sterlingsum is an information site and is not authorised to give debt advice. We link to organisations that are. We do not receive payment from any of the services listed on this page.

Pension tax relief explained

How the government tops up your pension, how to claim more and the limits to know.

The short answer

When you pay into a pension, the government adds tax relief, so part of your money would otherwise have gone to HMRC. Basic-rate relief is 20%, so a £80 contribution becomes £100 in your pension. Higher and additional-rate taxpayers can claim more. You can get tax relief on contributions up to 100% of your annual earnings, subject to the annual allowance.

Two ways relief is given

Relief at source: you pay from your take-home pay, and your pension provider claims the 20% from the government and adds it to your pot. This is how most personal pensions work.
Net pay: your employer takes the contribution from your pay before income tax, so you get relief at your full tax rate straight away. Check how your workplace scheme works, because low earners can be affected differently.
Salary sacrifice: a variation where you also save National Insurance, see salary sacrifice explained.

Higher and additional-rate taxpayers

In England, Wales and Northern Ireland, 40% taxpayers can claim an extra 20% through Self Assessment, and 45% taxpayers can claim an extra 25%.
Scottish taxpayers have different rates, because Scotland has more tax bands.
If you do not file Self Assessment, you can claim the extra relief another way, such as by contacting HMRC.
If you get relief through net pay, you usually get your full rate automatically.

A worked example

Say you earn £60,000 and pay £800 a month into a personal pension. The provider adds £200 in basic-rate relief, so £1,000 goes into the pot. As a higher-rate taxpayer you can claim a further 20% on the full £1,000, which is £200 a month back through your tax return or code, so the real cost is about £600 for £1,000 of pension.

Limits to know about

Annual allowance: £60,000 for 2026/27, covering your contributions and your employer's. Going over can lead to a tax charge.
Tapered allowance: it can reduce, down to a minimum of £10,000, for people with adjusted income above £260,000 and threshold income above £200,000.
Money purchase annual allowance: £10,000 if you have started to take money flexibly from a defined contribution pension.
No earnings: you can still pay in and get relief at source on contributions up to £2,880 a year (£3,600 with relief added).

Tax-free cash and tax when you withdraw

Most people can take part of their pension as a tax-free lump sum, usually up to 25% subject to the lump sum allowance, and the rest is taxed as income. Your Personal Allowance and tax code will affect what you pay. See the pension calculator and pension or ISA?

Where to learn more

This guide is for information only and is not tax or financial advice. Pension rules are complex, so check the official pages or speak to a regulated adviser before you act.