Pension vs MortgageWhich Builds More Wealth?

1. Personal Allowance. This calculation assumes the standard Personal Allowance of £12,570. It does not include Blind Person's Allowance or Marriage Allowance. The allowance is reduced above £100,000 of total income, as the tax rules require.
2. Pension tax relief rate. Relief is worked out band by band on your salary, for every nation. Where a contribution brings your income down across a band, each part gets that band's rate. If your income is over £100,000, a contribution can also restore Personal Allowance, which raises the relief on that part. Your regular contribution is counted first, because you pay it whichever option you choose. The budget share gets the relief it adds on top.
3. Scottish taxpayers. Scottish income tax bands apply to your salary. The extra relief for a Scottish higher-rate taxpayer is the part above the 20% your pension provider has already claimed.
4. Dividends and savings. Dividends and savings are taxed at UK rates. They do not change your Scottish band.
5. Location. Relief figures are shown only once you have chosen where you live and entered a salary.
6. Estimates. These figures are estimates based on the 2026/27 rules. They are not personal tax advice.
7. Current year contributions. This calculation, in any part of the UK, assumes you have paid no pension contributions in the current tax year. Contributions from earlier years are not counted.
8. Relief at source. This calculation assumes your pension contributions are paid net: your provider adds basic-rate tax relief (20%), and any further relief for higher rates is claimed through Self Assessment. The calculator spreads that extra relief across the year. If you file a Self Assessment return, HMRC gives it once a year, after you file; if you do not, you can claim it through your tax code instead. It does not model net pay arrangements, where the contribution is taken from pay before tax.
9. Earnings limit. Tax relief is given on contributions up to the greater of your salary or £3,600 gross a year. Contributions above that get no tax relief. Dividends do not count towards this limit.
10. Annual allowance taper. If your adjusted income is above £260,000 and your threshold income is above £200,000, your annual allowance is reduced, as the tax rules require, down to a minimum of £10,000. The calculation uses adjusted income and threshold income as the rules define them.
11. Wales. Welsh income tax rates are the same as England's for 2026/27, so the calculator uses England's rates for Wales. If the Senedd (Welsh Parliament) sets different rates in a future year, they are not yet modelled.

For a couple, each person's figures use their own location and salary. The combined total and the projected figures that carry the spouse's extra relief are until both locations are chosen.