Top up pension

freelunchtoday

So you don't think I can use previous years allowances?

xylophone

So you don't think I can use previous years allowances?

You wish to contribute £30,000 in this tax year and get tax relief but you do not have relevant earnings of at least £30,000 in this tax year.

There are two conditions for using previous years' allowances.

First, in the same tax year you must have earned at least the amount you wish to contribute.

Second, you must have been a member of a UK registered pension scheme in each of the tax years from which you wish to carry forward, even if you did not make contributions.

jem16

freelunchtoday wrote: »

So you don't think I can use previous years allowances?

You are getting confused over two different allowances.

One is the Annual Allowance which is set at £40k. If you wish to contribute more than £40k you can use previous unused allowances. This is called Carry Forward.

The second is the allowance for tax relief. This is limited to 100% of relevant earnings and only applies to the tax year you make the contribution.

The first limit doesn't apply to you as you're not making a contribution more than £40k.

The second limit does apply to you and as your relevant earnings are only £10k in this tax year, that is all you can contribute and get tax relief on. There is no point in contributing more as you won't get any more tax relief. Unused t6ax relief cannot be carried forward to another tax year.

freelunchtoday

Jem16,
That's cleared it all up, thks.
I'll keep £20,000 back, became a grandad yesterday!

jem16

freelunchtoday wrote: »

became a grandad yesterday!

Congratulations!

Enjoy the time - my little grandson is 11 months now and into everything! Great fun.

freelunchtoday

I know it's going off the thread Jem, but could you recommend an investment bond, or such like, that I could take out for my grandson, to mature in say 16yrs?

xylophone

Your grandson's parent could open a JISA for him which he could access at 18 - you could make a regular contribution to this.

https://www.gov.uk/junior-individual-savings-accounts/overview

If the parent had ( or was prepared to open) an ISA with Halifax, 4% would be available to the child.

Perhaps the parents would choose to use the JISA allowance half in cash and half in a stocks and shares product.

jem16

freelunchtoday wrote: »

I know it's going off the thread Jem, but could you recommend an investment bond, or such like, that I could take out for my grandson, to mature in say 16yrs?

I wouldn't say an Investment Bond would be suitable. Have a look at xylophone's suggestions though.

dunstonh

freelunchtoday wrote: »

I know it's going off the thread Jem, but could you recommend an investment bond, or such like, that I could take out for my grandson, to mature in say 16yrs?

What makes you think that an investment bond would be suitable? (its possible but you would have to fit a niche for it to be so).