March is upon us and spring around the corner, which should serve as a reminder of the end of tax year deadline. So whether you are serious about building a pension pot or taking the first step to planning for retirement, there is just over one month for you to pay this years contribution before 5th April tax-year end.

Investing in to pension provides an immediate boost from the taxman, which means that for every £1,000 you pay the government adds £250, making a total contribution of £1,250. Higher rate taxpayers receive even more benefit and can reclaim the additional tax relief via the self-assessment process.

This means that a 40% taxpayer would claim back an additional £250, and a 50% taxpayer an additional £375 in the above example. The more you pay in the greater the tax benefit, although the amount you can contribute is subject to limits. Broadly speaking you can contribute as much as you earn, although this is capped at a maximum £50,000 annual allowance.

Non-earners, such as children and people in retirement, can pay up to £2,880 pa to pension and the taxman adds £720 making a total invested contribution of £3,600.

You pay	Government adds	Total pension contribution	40% rate taxpayer		50% rate taxpayer
			Claim back 20%	Net cost to you	Claim back 30%	Net cost to you
£1,000	£250	£1,250	£250	£750	£375	£625
£2,880	£720	£3,600	£720	£2,160	£1,080	£1,800
£5,000	£1,250	£6,250	£1,250	£3,750	£1,875	£3,125

With pensions the devil is in the detail and if you intend to pay in a substantial sum to pension this year you should seek help from a financial adviser immediately. It is possible to carry forward unused annual allowance from three previous tax years subject to having been a member of a regulated scheme, enabling a maximum contribution of £200,000 to be made in the current tax year.

If you are a member of a company final salary scheme or have made large contributions in the last year you, or your adviser, may need to complete some further checks to ensure you do not breach maximum contribution limits. This is only likely to affect you if the combined value of contributions over two consecutive tax years is £50,000 or more.

There is no other investment that gives you the tax breaks of a pension. So make the most of pension tax relief and regardless of how much you intend to pay to pension you should take steps now well before the tax year deadline.