Pension Contributions Non -Taxpayer

dunstonh

I remember reading somewhere that the maximum relief available was up to the lower of £3,600 or your earned income (but can't remember where I read it).

Either a dodgy article you read or your memory is wrong.

If it had "whichever is higher" at the end of it, then it would be right.

Does that mean that tax relief would be applied to all of the £3600 contribution? (i.e. contribute £2,880 and get it topped up to £3,600 by HMRC?).

Only high earners can get tax relief reduced on a £3600 contribution.

rockingdane

A bit confusing isn't it. My wife too works part time and gets 200 £/ month. Her pension contributions are 10£. I wonder if I can top it . How do I go about it? ?
Dane

kidmugsy

rockingdane wrote: »

My wife too works part time and gets 200 £/ month. Her pension contributions are 10£. I wonder if I can top it . How do I go about it? ?
Dane

Open a SIPP with Hargreaves Lansdown (or use Cavendish Online or AJ Bell Youinvest or ......). She can contribute up to £3600 gross per annum, so subtract £120 = £3480. Multiply by 0.8 to get the net contribution = £2784. That's the amount you pay in.

Phone tomorrow or perhaps use their website, and you'll have squeezed in within the 15/16 tax year (ends 5/4/16).

rockingdane

Thanks. Is a SIPP better than a stakeholder pension? ?
Dane

dunstonh

rockingdane wrote: »

Thanks. Is a SIPP better than a stakeholder pension? ?
Dane

Depends on what you are using it for.

Is a car better than a aeroplane is effectively what you are asking. You get the vehicle that fits the need. Get the wrong vehicle and it is costly and inconvenient.