Paying £2880 into pension when retired

Malchester

Dazed_and_C0nfused said:

As a non tax payer at the moment £2880 is the max I can add

Non taxpayers aren't limited to £2,880 (net).

That's the limit for non earners.

Yes I know. My mistake. Sorry for confusion

vixen1500

Just paid in my £2880 into my SIPP.

But wondering why I can't pay in £3,200 as with tax relief that would bring me up to the annual allowance of £4,000, as I  have accessed flexible pension benefits?

MallyGirl

vixen1500 said:

Just paid in my £2880 into my SIPP.

But wondering why I can't pay in £3,200 as with tax relief that would bring me up to the annual allowance of £4,000, as I  have accessed flexible pension benefits?

Do you earn £4000? 

AlanP_2

vixen1500 said:

Just paid in my £2880 into my SIPP.

But wondering why I can't pay in £3,200 as with tax relief that would bring me up to the annual allowance of £4,000, as I  have accessed flexible pension benefits?

The limit is the LOWER of £3600 or taxable earnings so as MallyGirl says - did you earn £4k?


NOTE - Pension payments received don't count as taxable earnings. HMRC use the term "relevant earnings" and only certain types of rental income etc. are counted. 

vixen1500

MallyGirl said:

vixen1500 said:

Just paid in my £2880 into my SIPP.

But wondering why I can't pay in £3,200 as with tax relief that would bring me up to the annual allowance of £4,000, as I  have accessed flexible pension benefits?

Do you earn £4000? 

Around £7,500/£8,000, does that make any difference?  OH  only £2,500ish

MallyGirl

Yes it makes a difference - see the post above yours. The limit, for an earner who has activated MPAA, is £4k or the earned income - whichever is lower.
Since you earn £7.5k you can put in £4k.
If you earned £3.8k you could put in £3.8k.
If you earned £2.5k you could put in £3.6k as everyone, even a non-earner, is allowed to do that.
All figures are gross contributions so you have to do the maths to work out what you put in and what will be tax relief.

zagfles

MallyGirl said:

Yes it makes a difference - see the post above yours. The limit, for an earner who has activated MPAA, is £4k or the earned income - whichever is lower.
Since you earn £7.5k you can put in £4k.
If you earned £3.8k you could put in £3.8k.
If you earned £2.5k you could put in £3.6k as everyone, even a non-earner, is allowed to do that.
All figures are gross contributions so you have to do the maths to work out what you put in and what will be tax relief.

It's more complicated than that if you're in a workplace pension scheme.

The £4k MPAA includes employer contributions. So eg if someone subject to the MPAA earns £7.5k, pays £500 gross into the employer's DC scheme, and the employer pays another £500 in, they are limited to £3000 gross into a SIPP.

vixen1500

Can you only make the one payment?  Or could I make another to top it up?

MallyGirl

vixen1500 said:

Can you only make the one payment?  Or could I make another to top it up?

you can make multiple payments - it is just a pension. You just need to monitor the total contribution within the tax year and not leave the final payment too close to end of March in case the tax relief doesn't get applied until the following tax year

zagfles

MallyGirl said:

vixen1500 said:

Can you only make the one payment?  Or could I make another to top it up?

you can make multiple payments - it is just a pension. You just need to monitor the total contribution within the tax year and not leave the final payment too close to end of March in case the tax relief doesn't get applied until the following tax year

It doesn't matter if the tax relief gets applied in the next tax year, the whole gross contribution counts in the tax year the net contributions is paid, eg £2880 paid in on 31 March 2023, that's £3600 gross in the 2022/23 tax year even if the £720 tax relief isn't received till May.