For others contributing through this method, if you are a basic-rate taxpayer and contribute £80 to your pension, your provider would automatically claim back £20 in tax relief, boosting your contribution to £100.

If you're in Scotland and the starter rate of income tax at 19pc, or the basic rate at 20pc, you'll still get the standard 20pc tax relief on your pension contributions. Those who pay 19pc tax won't have to make up the difference.

The pension tax relief example from MoneyHelper in the table below shows how the two methods give you the same tax relief for a basic-rate taxpayer.

You're entitled to pension tax relief at the same rate as you pay income tax, even if it's 40pc or 45pc. This applies to both net pay and relief at source schemes.

It may be that tax relief is claimed automatically on your pension contributions - but some people may have to put in a little more effort.

The 20pc element of your pension tax relief will be handled automatically. If your scheme is relief at source, your provider will claim this from HMRC for you and it's added to your pot. If it's net pay, no action is needed as you receive the relief by not paying tax on that part of your salary.

For higher rate payers, unless you're in a net pay scheme you'll have to claim the extra 20pc or 25pc tax relief yourself. If you're in self assessment, such as if you're self-employed, you need to do this on your tax return. If you're not, you can still fill one in, or you can just call or write to HMRC. You'll need to do this every year.

To do this on a tax return, in the "tax reliefs" section go to "Payments to registered pension schemes where basic-rate tax relief will be claimed by your pension provider". Here, you should include the total gross value of your pension contributions, and the tax relief will then be calculated.

This money will either be returned to you as a rebate, a reduction in your tax bill or a change in your tax code.

It is important to claim, otherwise you are missing out on extra money that could be going into your pension and ultimately boost your retirement.

For example, if a higher rate taxpayer contributes £32,000 in a year, they would automatically get £8,000 of pension tax relief at the basic marginal rate, boosting their contribution to £40,000 that can then be put to work in the stock market.

But as they are a higher earner, they are still owed an extra 20pc in tax relief, giving them an additional £8,000 refund from HMRC. This means the actual cost of the £40,000 contribution for the saver was only £24,000. This is summarised in the table below:

"Neglecting to make a claim can mean you're missing out on thousands of pounds annually," said James Corcoran, senior chartered financial planner at Lumin Wealth.

Yes - pension tax relief is paid on contributions worth up to the annual pension allowance each year, which is currently £60,000 or 100pc of your salary - whichever is lower.

If you contribute more then you won't get any relief, plus you will be charged tax at your marginal rate on the excess. The same allowance covers all of your pensions, so if you pay £10,000 into one pension and £10,000 into another, it uses up £20,000 of your allowance. Money paid in by your employer counts towards it too, as does any tax relief you receive.

However, a higher earner can "carry forward" unused allowances for the previous three tax years.

Still have questions about pension tax relief? Here, we answer some of the most common questions about how it works.

Pension savers can claim tax relief on contributions from the previous three tax years using carry forward rules.

This lets you make use of any unused allowance and to get tax relief on pension contributions.

The allowance for the 2021-22 and 2022-23 was £40,000 per year, but it went up to £60,000 for 2023-24. and is the same this year. This means you could potentially pay up to £200,000 into a pension before April 6 2025.

However, there is another limit to be aware of.

You cannot pay in more than your "pensionable earnings" for the year, so to pay in £200,000 you would need to be earning at least that amount from your salary.

It can be easy for people who are busy with work and family to lose track of these rules, so Mr Corcoran added that it may be worth consulting a financial planner to help ensure you are getting all the perks towards saving for your retirement.

There is an option when completing a self-assessment tax return to include your pension contributions.

You can see how much you put into your pension on your payslips, so you will need to calculate the amount you contributed throughout the tax year. It is important to include the basic-rate of tax relief you received in the total amount.

HMRC will then calculate the extra higher rate pension relief owed based on whether you are a higher or additional rate taxpayer and are owed a 20pc or 25pc refund.

Another option, if you don't regularly complete a tax return, is to contact HMRC directly. But this could mean waiting a long time on hold due to its understaffed phone lines, plus if you claim the money back every year then it may be more effective and less time-consuming to just complete a self-assessment form.

"Maintaining accurate records of contributions and relief claimed is essential for tax compliance and future financial planning, particularly given the impact of contribution limits on tax relief eligibility," said Becky O'Connor, director of public affairs at PensionBee.