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Confused about maximum amount I can pay into Pension
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funkster999
Posts: 5 Forumite
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?
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?
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Comments
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£3600 is your limit. It has to be earned income. Not investment income. So, property income does not count as earned income.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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