Get around the £30,000 salary rule.

DavidLaGuardia

Anyone from birth to age 75 can put £3,600 into a pension irrespective of earnings, except where the only source of earnings relates to employment or related employment where the individual is a member of an occupational scheme AND has eatings in excess of £30,000 p.a.

If another soure of earned income existes then the individual can put in £3,600 or a higher amount dependant on age if the other sourve is larger enough.

Hence an individual on more than £30k in an occupational scheme can put in to a personal pension if they declare earnings from another source.. so they can wash a neighbour's windows for a fiver declare it as Self Employed earninigs unrelated to their employment and for very little paperwork have access to an additional Personal Pension.

paul666

I don't think so, otherwise I could do 10 jobs for a fiver and contribute £36,000 to 10 pensions. ;D ;D ;D ;D - If I could afford it... the IR aren't *that* dumb.

Pal

Wait until April 2006. Then just about anyone (except a few very high earners) will be able to put as much as they like into any pensions they like. In the meantime stick the money you would be saving into a suitable savings vehicle.

DavidLaGuardia

I don't think so, otherwise I could do 10 jobs for a fiver and contribute £36,000 to 10 pensions. ;D ;D ;D ;D - If I could afford it... the IR aren't *that* dumb.

Precisely NOT. The allowance is not PER job is the same aseveryone else's £ 3,600 unless earnings are higher. Having OTHER eanings aside from earnings related to occupational pension permits this.
This is a bona fide tip, and if you don't believe me make your own enquiries.

paul666

I wrote: <i> Isn't there still a limit of 100% of salary?</i>
This is true but apparently, if it's the same year as the year when you take (divest) the pension, then there's no limit.
(apart from the limit on tax relief of 1.4M)
That makes saving in a pension stone dead.

DavidLaGuardia

I wrote: <i> Isn't there still a limit of 100% of salary?</i>
This is true but apparently, if it's the same year as the year when you take (divest) the pension, then there's no limit.
(apart from the limit on tax relief of 1.4M)
That makes saving in a pension stone dead.

Yes this is the case but from April 2006.
Incidentally, I did not know about the ability to put in what you like in the year you "divest"
However, if the latter is done, I wonder if many higher rate tax payers would not get as much relief in total as they would by offestting yearly savings against tax.?
Another point, its importance depending on individual circumstances, is the protection of pension funds in bankrupcy that does not apply to other assets.