Self-employed, wanting to start paying into a pension

LadyC

Hi,

I'm a self-employed childminder, currently earning around the £10k mark. I have SW pension, started when I was employed, and as I usually earn very near to the £10k threshold, (and need to kickstart pension payments!) I was wondering if it's as simple as just starting to pay into it again to keep my earnings below the threshold. Would this be my best bet? Is it a tax-deductable 'expense' - is there a better way forward - ISA?

TIA

atush

First of all you have to check with SW if you can start paying in a again, and check the annual costs.

Because, you may find a cheaper platform (and could transfer the old pension to it as well). So have a look at Cavendish online or HL.

How a pension would work is, you pay in 80 quid, and the pension provider will tell HMRC who will add 20, so 100 goes in overall. This is your tax relief.

xylophone

What do you mean by

the £10,000 threshold?

jem16

One would imagine she means the threshold to start paying tax which is £10,600 as opposed to £10k.

atush

So they need to knwo they can pay in their entire earned income or 3600 (both less tax relief and whichever is higher) even if they are a non taxpayer. and the 3600 even if they dont earn.

LadyC

Ok, that's great, thanks I'll look into it a bit more.

Yes, meant £10.6k, sorry!