If one partner earns significantly more than the other — or if one partner is not working — paying into the lower earner’s pension is one of the most tax-efficient strategies available to couples in the UK.
The key point: the tax relief goes into your spouse’s pension, not yours. You fund the contribution; they get the tax top-up. The result is a larger household pension pot built at a lower overall tax cost.
How It Works
When you pay money into your spouse’s SIPP or personal pension, the transaction looks like this:
- You transfer money from your bank account to your spouse
- Your spouse (or you directly, via a third-party contribution) pays into their pension
- The pension provider claims 20% tax relief from HMRC on a relief at source scheme
- Higher-rate taxpayers claim additional relief via self-assessment in their own name
The contribution is always in your spouse’s name. The annual allowance and contribution limit that applies is their allowance, based on their earnings.
Contribution Limits by Spouse’s Earnings
| Spouse’s annual UK earnings | Maximum gross contribution | Net cost to you |
|---|---|---|
| No UK earnings | £3,600 | £2,880 |
| £15,000 | £15,000 | £12,000 (basic rate relief applied) |
| £30,000 | £30,000 | £24,000 (basic rate relief) |
| £60,000+ | £60,000 (annual allowance cap) | £48,000 net (basic; additional relief if higher rate) |
All contributions from any source count toward the annual allowance. If your spouse has an employer pension with contributions already going in, those reduce the headroom for additional contributions.
The Non-Taxpayer Advantage
If your spouse or partner has no income or earns under £12,570 (the 2026/27 personal allowance), they pay no income tax. But under a relief at source pension, HMRC still pays 20% basic rate relief into their pot.
Example: You contribute £2,880 into your partner’s SIPP. HMRC adds £720 (20%). The pension pot receives £3,600. Your partner paid no tax. This is effectively a 25% return on the contributed amount simply from the tax top-up.
Higher-Rate Households
If one partner pays 40% or 45% tax and the other pays 20% or nothing, contributions into the lower earner’s pension generate 20% basic rate relief — but the couple as a unit does not claim back higher-rate relief on those contributions. However, the strategic value remains: you are building pension wealth at 20% relief rather than no relief, which is still meaningful.
If the higher earner instead increased their own pension, they would get 40% relief on additional contributions. So the optimal approach depends on which partner has more headroom under the annual allowance.
The April 2027 Change
From April 2027, unspent defined contribution pension pots will be brought within the scope of inheritance tax. Pension pots were previously a highly tax-efficient way to pass wealth outside of your estate. After the change, you will need to factor pension values into estate planning decisions alongside ISAs and other assets.
Before April 2027, couples with one partner having a small pension and a large estate may wish to contribute more aggressively to build the lower earner’s pension — still a useful strategy even with the upcoming change.
Worked Example
Scenario: Sarah works full-time earning £65,000/year. Her husband Tom has stepped back from work and earns £8,000 from occasional freelance work.
Tom’s relief at source SIPP: Sarah contributes £8,000 from their joint account into Tom’s SIPP. Tom’s pension provider claims £2,000 from HMRC (20% basic rate). Tom’s pot receives £10,000.
Tax efficiency: £8,000 spent → £10,000 in pension. Tom’s earnings of £8,000 are below the personal allowance so he pays no income tax, yet the pot still receives £2,000 in tax relief — effectively free money.