Advice on applying for Personal Pension

Mick442504
Mick442504 Posts: 18 Forumite
in Pensions, annuities & retirement planning
Hi all

I have a question, i am looking at taking out a personal pension and am a bit confused with regards to tax relief and "non earners" - it says that even non earners and people not working can still contribute to a personal pension and recieve 20% tax relief (i think) my question is - i am not working and am on ESA and i was thinking of putting small amounts away each month, would i still be able to apply and contribute to a personal pension even though i am on state benefit? (ESA)

Any advice is welcome.

Josh

Comments

  • dunstonh
    dunstonh Posts: 116,346 Forumite
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    would i still be able to apply and contribute to a personal pension even though i am on state benefit? (ESA)

    Yes you can.

    However, do remember that when you eventually start the pension income, that is classed as income for means tested purposes. So, you may get tax relief now, but if you are likely to be on benefits in retirement, it may cost you then.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Sun-Is-Fun
    Sun-Is-Fun Posts: 243 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    Mick442504 wrote: »
    Hi all

    I have a question, i am looking at taking out a personal pension and am a bit confused with regards to tax relief and "non earners" - it says that even non earners and people not working can still contribute to a personal pension and recieve 20% tax relief (i think) my question is - i am not working and am on ESA and i was thinking of putting small amounts away each month, would i still be able to apply and contribute to a personal pension even though i am on state benefit? (ESA)

    Any advice is welcome.

    Josh

    Yes, you can contribute £2880 a year if you don't work and tax relief gets added to make it £3600.

    Just take note, as has been said, that your benefits may be reduced when you claim that pension, as it is classed as relevant earnings, so you'll need to do some maths to see what is best financially for you.
  • xylophone
    xylophone Posts: 44,375 Forumite
    Name Dropper First Anniversary First Post
    You can contribute up to £2880 per tax year.

    If the monthly amounts are modest, a simple stakeholder might suit.

    https://www.cavendishonline.co.uk/pensions/stakeholder-pensions/
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