Sophie, a basic-rate taxpayer in England, pays £80 a month into a personal pension under relief at source. How much is credited to her pension each month?
Under relief at source the member pays net of basic-rate tax relief at 20%, and the provider claims the relief from HMRC: £80 net grosses up to £100 (80 ÷ 0.8). Higher-rate taxpayers can claim further relief through self assessment (gov.uk, tax on your private pension contributions; Finance Act 2004 s192). £96 adds 20% of £80 rather than grossing up, and £64 deducts 20% instead of adding the relief.
Adding 20% to the net contribution instead of grossing it up.
Practise more FRE1 The Retail Consumer: Needs, Priorities & Products questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.
Start practising →Original practice material mapped to the published CeMAP FRE1 learning outcomes. Independent, not endorsed by Walbrook (formerly LIBF). Verify figures and rules against current guidance before relying on them.
