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  • FIRST POST
    • g-o-g
    • By g-o-g 19th Apr 17, 11:53 AM
    • 1Posts
    • 0Thanks
    g-o-g
    Using state pension to set up a private pension?
    • #1
    • 19th Apr 17, 11:53 AM
    Using state pension to set up a private pension? 19th Apr 17 at 11:53 AM
    Hi
    I currently draw 2 company pensions and am about to become eligible for a state pension which would be taxed at 40%, should I:
    * delay receiving my pension or
    * can I use it to set up a private pension and will the government then pay into it?
    Thank you
Page 1
    • Dazed and confused
    • By Dazed and confused 19th Apr 17, 12:13 PM
    • 1,384 Posts
    • 568 Thanks
    Dazed and confused
    • #2
    • 19th Apr 17, 12:13 PM
    • #2
    • 19th Apr 17, 12:13 PM
    May depend on your age but you may be able to pay £2880 into a sipp which would be grossed up to £3600 with basic rate relief added at source.

    As a 40% payer you could potentially get a tax refund from HMRC as the pension contribution has the benefit of increasing the amount you pay basic rate tax on.
    • zagfles
    • By zagfles 19th Apr 17, 12:13 PM
    • 11,857 Posts
    • 9,810 Thanks
    zagfles
    • #3
    • 19th Apr 17, 12:13 PM
    • #3
    • 19th Apr 17, 12:13 PM
    You can't pay pension income into a pension - other than the £2880 net (£3600 gross) which anyone can pay in (until you're 75).

    Or rather you can, but you wouldn't get tax relief which usually makes it a bad idea.

    If you have employment income you could pay that in.
    • xylophone
    • By xylophone 19th Apr 17, 12:39 PM
    • 21,643 Posts
    • 12,448 Thanks
    xylophone
    • #4
    • 19th Apr 17, 12:39 PM
    • #4
    • 19th Apr 17, 12:39 PM
    A relative has a DB pension and state pension and is fully retired.

    Because he is under 75, he can still contribute to a pension scheme and receive tax relief but he is limited to £2880 (net) because he now has no relevant earnings.

    He has done this since retirement - in his case it means that he remains a basic (rather than 40%) tax payer and also remains eligible for the £1000 (rather than £500) PSA.

    He submits SA form to HMRC each year.
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