Pension tax relief works on the principle that contributions to pensions are exempt from tax when they are made, but taxed when they are paid out. Pension contributions made by individual employees are usually paid out of pre-tax salary, so tax relief is received at the individual’s marginal tax rate
The report looks at the annual allowance and lifetime allowance – which limit the amount that can be saved tax-free in a pension – and the reductions in those allowance since 2010