It may sound like a funny notion, but the way that you get pension tax relief is down to how much you earn and the type of scheme that you belong to.

For example, if you are a basic rate tax payer, contributing to a personal pension plan £800 out of your already taxed income, the Government will kindly add a further £200, paid directly into your pension scheme. This means you are effectively getting back the tax that you originally paid so the total £1,000 goes into your pension.

If you are on a higher rate tax bracket, you will get the same but you can also claim a further £200 in tax relief by filling in a self assessment form. This is then refunded to you as an adjustment in your tax code, so effectively you end up paying less tax.

If your employer pays your pension directly into a defined benefit or final salary scheme before your salary is taxed then this means that there is no tax relief on your pension contribution. This means that your income tax is based on your salary minus the contribution. This is particularly helpful to those whose salary only takes them just over into a higher taxed salary bracket.

Just a bit of interesting information about your pension scheme that you might not have yet realised.

However, all of this is now going to significantly change for high earners as a result of the changes made in this budget (2009).