Added Civil Service Pension

bigchipper

I intend buying some added pension in the Civil Service Classic pension scheme by lump sum payment in the current pension input period. Before doing so I want to ensure I fully understand the tax implication.

As my annual salary is £42k my understanding is that this is the maximum amount I could pay into my pension that would be tax refundable. This is despite having a significantly greater amount of accrued Annual Allowance available to me (over £150K according to the HMRC website).

Is this correct or would I get tax refunded on the full £150k (if I actually had this to pay in)?

Thanks

b-c

Linton

bigchipper wrote: »

I intend buying some added pension in the Civil Service Classic pension scheme by lump sum payment in the current pension input period. Before doing so I want to ensure I fully understand the tax implication.

As my annual salary is £42k my understanding is that this is the maximum amount I could pay into my pension that would be tax refundable. This is despite having a significantly greater amount of accrued Annual Allowance available to me (over £150K according to the HMRC website).

Is this correct or would I get tax refunded on the full £150k (if I actually had this to pay in)?

Thanks

b-c

You can only get tax relief up to your total salary. There is a further limit of £50K were your salary to exceed that, which reduces to £40K once the budget proposals are implemented.

hugheskevi

In case you are not aware, the amount you are deemed to have contributed for Annual Allowance purposes will be different to the amount you actually contribute - the difference could become very important if you are below 40.

bigchipper

hugheskevi wrote: »

In case you are not aware, the amount you are deemed to have contributed for Annual Allowance purposes will be different to the amount you actually contribute - the difference could become very important if you are below 40.

Alas I am well over 40 . I am aware of this but its interesting that using the HMRC calculator or following the Civil Service Pension guidance produces different values of accrued AA available to me. Both are far in excess of what I am looking to contribute so its not a problem.