Maximum contribution rules

Twonko

I understand that the maximum annual contribution for someone already drawing a pension is £4000. My question is does this apply to overseas pension? I have taken a pension paid by the Jersey government but I also now work part time, earning about £35000 pa. I would like to pay enough into my pension to get the 40% relief on everything over the threshold. This would be about £12000 pa. is this allowed?

Thorsson

Where did you get this figure of £4,000 from? Providing you're not over 75, you can put up to £40k a year into your pot, subject to the lifetime allowance. I'm drawing a UK pension and the SP and have put around £120k into my pot over the last 4 years.

Dazed_and_confused

Providing you're not over 75, you can put up to £40k a year into your pot, subject to the lifetime allowance

Possibly a bit of an oversimplification.

You have to have the relevant earnings to be able to contribute more than £3,600 (gross).

And the MPAA limit (the £4,000 the op refers to) could apply to someone currently drawing a pension.

Thorsson

Dazed_and_confused wrote: »

Possibly a bit of an oversimplification.

You have to have the relevant earnings to be able to contribute more than £3,600 (gross).

And the MPAA limit (the £4,000 the op refers to) could apply to someone currently drawing a pension.

Well, yes, you have to be earning the money, but the OP said, "I understand that the maximum annual contribution for someone already drawing a pension is £4000", which is clearly not the case. He also said he worked part time, so is clearly getting some income. Further the MPAA limit is the limit without a tax charge, not the absolute limit and he hasn't mentioned how he's taking the pension, but I would rather expect it to be DB, given it's from the Jersey Government.

hyubh

Thorsson wrote: »

Well, yes, you have to be earning the money, but the OP said, "I understand that the maximum annual contribution for someone already drawing a pension is £4000", which is clearly not the case.

He was clearly alluding to the MPAA...

He also said he worked part time, so is clearly getting some income. Further the MPAA limit is the limit without a tax charge, not the absolute limit

'I would like to pay enough into my pension to get the 40% relief on everything over the threshold' - the OP was clearly having in mind the maximum for getting tax relief. Clearly clearly

and he hasn't mentioned how he's taking the pension, but I would rather expect it to be DB, given it's from the Jersey Government.

I'd imagine so too, however does it actually matter, when the old pension was drawn overseas...? Genuine question - my own guess would be 'no', though I'm struggling to find a definitive statement either way.

Dazed_and_confused

Thank you hyubh.

Sibbers123

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm056520

There are your trigger events. If you meet one of them, you will be subject to the £4,000 MPAA.

You say you're earning £35k but you want to put in £12k to avoid higher rate tax. Therefore, you have other income of around £23k (is this your pension income?) and total income of around £58k?

If that is the case, you may need to consider your lifetime allowance also depending on your other pensions.