Confused about maximum amount I can pay into Pension

funkster999

I had a Stakeholder Pension for quite a few years and this year transferred it to a SIPP.

I have had a very small income (less than £3,600) from self-employment since ceasing employment 4 years ago. However, I also have rented out a room for a lot more (up to 8 or 9k or more, - it's in central London), and also have significant savings.

My question is, how much am I allowed to pay into the Stakeholder Pension or SIPP. I know that, if you have no or less than £3,600 earnings, it is a maximum of £3,600 gross (£2,880 net to which the taxman adds £720). But what if I wanted to pay in more from room-rental/savings? How could I work out the correct limit, or does the taxman basically work it out for me after I enter on tax-return what I have paid into pension.

I realise I have been taxed through my tax-return on some of the rent-a-room income (I believe the tax-free allowance is £4250) , and also that I have paid tax on savings-interest (some of which was credited back because of low income otherwise), so will this cover me for additional amounts paid into Pension.

What if I didn’t have the rent-a-room income and just wanted to make an additional payment from savings, in particular ones with very little interest earned and taxed?

dunstonh

£3600 is your limit. It has to be earned income. Not investment income. So, property income does not count as earned income.