SIPP - Maximum Contributions????

Pelly_2

Does anybody know what the limit is for the maximum contributions in this tax year?

I would like to set up a new SIPP and transfer in as much as I can ASAP.

Is there an upper limit for employer's contributions?

I have been told that the normal calculation is 17.5% of salary (I am under 35) but there are additional calculations using "basis" year with "related earnings" (?) but capped at £100,000 i.e. £17,500 per year. Is there a simple maximum figure that can be paid in?

Although I have been told that the rules are changing as from April 2006 whereby there is an overall limit of £215,000 payable into a SIPP.

Any help would be much appreciated!!!

dunstonh

The SIPP has the same contribution limits that apply to all other pension wrappers for this tax year.

Next year, you will be able to pay 100% of your earnings into a pension and further supplement that by upto £215,000 with employers contributions. This is until the year when benefits are taken where there is no limit at all (apart from lifetime allowance).

Pelly_2

Thanks dunstonh,

I approached an IFA and he said that he could calculate what the maximum would be that I could pay in but wanted to charge me ££££'s for the privilege!!! He said that the "basis year" calculation would mean I could pay in more than the standard. Do you know if this is correct?

If my gross annual remuneration has been approx £60,000 for the past few years then surely I can work out 17.5% of that myself!!!

It sounds as though it would be better to wait until next year to set up a SIPP as you then have a much more flexible contribution limit.

dunstonh

I approached an IFA and he said that he could calculate what the maximum would be that I could pay in but wanted to charge me ££££'s for the privilege!!!

Cant blame him. He does have to pay his mortgage.

He said that the "basis year" calculation would mean I could pay in more than the standard. Do you know if this is correct?

Not since 5th April. Basis year was removed on 5th April. (note to that is that it was meant to expire 5th April but I cannot confirm at this time if that was put back to next April to match pension simplification. It appears that a bit of searching suggests both dates!!!)