Question about SIPP contributions

barginfinder

I'm a basic rate taxpayer and have been enrolled in my company pension scheme since 2007. I pay 5% of my salary and the company matches it

I also started paying into a SIPP (with H&L) monthly from Sept 2016 and am still paying circa £200 month

I'm currently on unpaid leave (sabbatical) since Jan 2017 until Jan 2018. The company pension contributions have been suspended for that time

My understanding now is that I can utilise my unused contributions for the last 3 years as I have been paying onto pension scheme for those 3 years.

Before I was aware of this I had been funding an ISA instead as I though I would be limited to £2880 as a non earner.

I'm in a position to pay much more that the £2880 a non earner can pay but want to be sure I will be entitled for 25% top up from the taxman if I were to say put £1000 per month in between now and me starting work again in late Jan. My understanding is I can - can anyone confirm this?

Thanks in advance

dividendhero

barginfinder wrote: »

I also started paying into a SIPP (with H&L) monthly from Sept 2016 and am still paying circa £200 month

Is H&L Hargreaves Lansdown? If so you could call them, unlike many companys in the sector they do have UK based staff who do know their stuff. I've an account with them and asked them some pretty complex stuff and they've answered every time, however Halifax share dealing failed to answer a relatively straightforward question on ISA's..

greenglide

Before I was aware of this I had been funding an ISA instead as I though I would be limited to £2880 as a non earner.

You are limited to £3,600 in any tax year in which your earnings are £3,600 or less. You cannot use carry forward to get round this.

But if you have not worked from January 2017 to January 2018 you will presumably have relevant earnings in both tax years.

You cannot do anything about the year to April 2017 now. Once you know that you have restarted work in 2018 you can make pensions payments then up to the limit of your earnings in 2017/2018.

grey_gym_sock

no, you're limited to £2880 (i.e. £3600 after the tax relief is added) if you have no earnings in the current tax year.

there are 2 separate limits involved for pension contributions in a tax year (if they are to benefit from tax relief):

1) your own contributions (including tax relief) can't exceed your earnings in the tax year (or £3600, if you earn less than that). you can't get round this limit by carrying anything forward.

2) the total of your contributions and any employer contributions can't exceed the annual allowance (viz. currently £40,000). this limit can be sometimes be exceeded by carrying forward unused annual allowance from the previous 3 tax years.

Money_Help

If your married/civil partnership you could also contribute to you partner's pension providing it does not exceed their allowance when added to contributions already made by them and their employer.

barginfinder

Thanks, but I'm not married or in a civil partnership - so another door closed

xylophone

but I'm not married or in a civil partnership

If your bank accounts are bulging I'm sure you could find a candidate willing to share......:)

bigadaj

xylophone wrote: »

If your bank accounts are bulging I'm sure you could find a candidate willing to share......:)

Yes, but that solution could end up with the bank accounts not being bulging.....

Mnd

It might be worth it though