Can I pay into more than one pension fund and still get tax relief

gazza26

I have just joined a new company that has a company pension scheme with fidelity. However I can only invest a maximum of 15% of your monthly salary into the fund.

However because of missing years for various reasons, I want to pay more into my fund now to ensure a good pension at the end and offset some of the 40% tax i would pay otherwise. Can I pay into another pension scheme and still get the tax relief. I was thinking of just restarting investing in a previous pension scheme put as a private one or start a new one completely.

It will be under the £40K yearly limit by a long chalk and I get paid well under £100k.

Can anyone out there advise me if this is possible or not. I have had various company pensions over the years and never had one that limits how much I can pay in, and I really at this time in my life, 50, don't think the 15% is sufficient to give me a decent pension.

Any shared knowledge would be most appreciated as I just can't find anything recent on the 'net! (but that might just be me being rubbish)!

xylophone

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/member-contributions-tax-relief-and-annual-allowance/

Many people contribute to both a personal pension and an employer's scheme.

It is likely (but check) that tax relief on your occupational pension is on "Net Pay" basis but your contributions to a personal pension will be "relief at source" - you will need to claim higher rate relief from HMRC.

https://www.gov.uk/workplace-pensions/managing-your-pension

Alexland

This seems very strange are you sure this isn't just the limit for the employer matching contributions? E.g. you add 5% the employer adds 10% and anything more wouldn't get matching. Our workplace scheme is Fidelity and they are happy to take more than 15%.

AnotherJoe

Yes its possible and allowed. You can pay into multiple. But as said do check that limit isnt just for employer matching rather than the total.


Note when you fill in your SA form in you state what it is after the 25% uplift.
If you pay in say £8k, you say you've added £10k.

Albermarle

The 15% limit is strange and probably more to do with your employer than with Fidelity.
You should be able to contact Fidelity, or have on line access to your workplace pension. In which case you could make separate lump sum payments directly . Or in most cases you could start to contribute again to an older pension , or start a new one . Or do all three !

Alexland

Yes but it would be better via the employer as you might get salary sacrifice to save the NI and it avoids the need to claim the higher rate tax back. I suspect this is just a misunderstanding.

gazza26

Thank you all for your responses.

Sadly it is definitely a maximum of 15% from me, the company add a max of 4% in addition to the 15% so overall max 19%. I have read and re read the policy document because I just thought it was odd on first glance. So it looks like a second pension pot to me but as least it spreads the risk! but grrrr.... the tax form at the end of the year...!

Responses very much appreciated!

Alexland

Is it worth talking it through with your HR department to understand if this really was their intention when drafting the document?

I struggle to think of a scenario where the employer would need to implement this policy. Unless it is to limit their salary sacrifice obligations in the event of maternity, illness, etc but as I recently discovered that risk no longer applies.

gazza26

Thanks Alexland.

I think I am going to wait to get the login codes for online access and maybe ask Fidelity directly. But it is a mass product document from the employer and has a very specific paragraph on the 15%. It was also mentioned in the original offer letter so it doesn't appear to be a mistake. So will have to work with it.

but I agree with you very odd and I can't think of any reason they would benefit them in putting a cap on contributions.

Dazed_and_confused

but grrrr.... the tax form at the end of the year...!

You either include the details on your Self Assessment return, if you are required to complete one, or just phone/write to HMRC with the details if not.

If you pay a very large amount (over £10k?) that in itself might mean you have to file a tax return when you wouldn't otherwise do so.

If you want to you can get tax relief during the year by asking HMRC to adjust your tax code to include details of the pension contributions.

Alexland

Dazed_and_confused wrote: »

If you pay a very large amount (over £10k?) that in itself might mean you have to file a tax return when you wouldn't otherwise do so.

I have been contributing plenty more than £10k pa via payroll deduction (including occasional adhoc bonuses greater than £10k) for as many tax years as I can remember and have not been asked to complete self assessment. Fidelity are obviously happy to receive the contributions as they charge a percentage fee so the bigger the better.

Alex