Pensioner Paying Into SIPP

Theta101

Hi

I'd like to know how much a non working pensioner can pay into a SIPP.

Sex: Female
Age: 64
State pension: £8,320 / year
Teachers DB pension: £2,000 / year
Total "INCOME" = £10,320 / year

Would she be limited to paying in £2,880 / year (topped up to £3,600 by Tax Relief).
Or could she pay in £8,000 /year (topped up to £10,000 by Tax Relief).
Or some other yearly amount.

Thanks.

LHW99

It has to be earned income, so pensions don't count.
That means you're limited to the £2880 net per annum until age 75 when even that is not allowed

kidmugsy

She's got the old-style state pension. That means that, if she has capital that she could invest, her best bet probably isn't contributing to a pension, but rather deferring her state pension and living off the capital instead. See this thread
https://forums.moneysavingexpert.com/discussion/5487668

Theta101

Thanks for the replies!

The reply about deferring her state pension has confused me!!
I'll have to read up on that some more.
I have to admit I couldn't see any benefit to deferring the SP, obviously I'm missing something.
Also first time I've seen 10.4% mentioned.

Thanks.

xylophone

http://www.thisismoney.co.uk/money/pensions/article-3118567/Delaying-state-pension-just-year-net-10k.html

You are currently drawing your state pension but if you wish, you can "de-retire" by advising DWP that you do not wish to draw it for a period - that period is up to you.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/527015/state-pension-deferral-if-you-reached-state-pension-age-before-6-april-2016-extra_information.pdf

You would then use your capital to replace the state pension you are deferring until you are ready to take it again.

As you have no earned income, you are limited to a net contribution of £2880 if you wish to contribute to a personal pension of some sort - the pension provider would reclaim the tax relief.

Theta101

Thinking about my own case...

I'll reach SP age of 66 in 6 years time, but I plan on working full time till I'm 70 (that's what my spreadsheet says anyway!).

Q1. If I defer my SP by not claiming it at age 66, will I still have to pay employees NI?
Q2. If I claim my SP at age 66, I know I will not pay NI. But If I then defer it for a year, will I restart paying NI?

My head is hurting now

xylophone

Re NI see https://www.gov.uk/tax-national-insurance-after-state-pension-age/overview


You reach SPA in the new system and deferring does not yield such generous benefits.

https://www.gov.uk/deferring-state-pension/what-you-may-get

Have you obtained a new state pension statement?

https://www.gov.uk/check-state-pension