How much can I contribute?

Malchester

Am a bit confused and wondered if anyone can help. Taking early retirement in 3 weeks with a small pot DC pension of c£8700. The Pension Trust (who run the scheme) only provide option to take full amount as cash or purchase an annuity. Neither suits me. Only option is to transfer elsewhere. If I do this how much could I add to the pension pot this financial year?

Have contributed c£1000 from employment earnings (excluding employer contributions of 3%) of around £3000. No more earned income expected this financial year. Also have c£6000 this financial year from DB pension. So I am a non tax payer. Looking to contribute additional Lump dum to the pension but unclear how much I can add.

So can I contribute up to my earnings (and does this include pension as well as employment income, or just employment income)? Or, as a non tax payer am I restricted to £2880 in total, including amount already contributed from employment earnings (increased with tax relief to £3600)? Have spoken to the firm I want to transfer to (PensionBee) and they could not answer. Any help would be appreciated. Thanks

Dazed_and_confused

Why do you think non tax payers are limited to paying £3,600 (gross)?

AnotherJoe

Malchester wrote: »

Am a bit confused and wondered if anyone can help. Taking early retirement in 3 weeks with a small pot DC pension of c£8700. The Pension Trust (who run the scheme) only provide option to take full amount as cash or purchase an annuity. Neither suits me. Only option is to transfer elsewhere. If I do this how much could I add to the pension pot this financial year?
Your pension income has nothing to do with how much you can contribute to a pension.


Have contributed c£1000 from employment earnings (excluding employer contributions of 3%) of around £3000. No more earned income expected this financial year. Also have c£6000 this financial year from DB pension. So I am a non tax payer. Looking to contribute additional Lump sum to the pension but unclear how much I can add.
£2880 minus your aprox £1,000 (£2880 because you earned less than £3,600 and 80% of £3600 is £2880)


So can I contribute up to my earnings (and does this include pension as well as employment income, or just employment income)?
Just employment
Or, as a non tax payer am I restricted to £2880 in total, no you are restricted to 80% of what you earned in that case including amount already contributed from employment earnings (increased with tax relief to £3600)? Have spoken to the firm I want to transfer to (PensionBee) and they could not answer. Any help would be appreciated. Thanks

HTH additional text

Malchester

Dazed - because that is the maximum figure quoted assuming I only want to contribute an amount that will give me a tax refund. If I was not bothered about a tax refund I could contribute more

Malchester

AnotherJoe - thanks a lot for that it is really helpful. Because employment income is less than £3600 I can contribute £2880 less what I have already paid in which will be credited with the tax refund. I assume next financial year I can put £2880 in to be credited with the tax refund (assuming no earned income above £3600

AnotherJoe

Malchester wrote: »

AnotherJoe - thanks a lot for that it is really helpful. Because employment income is less than £3600 I can contribute £2880 less what I have already paid in which will be credited with the tax refund. I assume next financial year I can put £2880 in to be credited with the tax refund (assuming no earned income above £3600

Correct. There's a whole thread on contributing £2880 in this forum.

Dazed_and_confused

Dazed - because that is the maximum figure quoted assuming I only want to contribute an amount that will give me a tax refund. If I was not bothered about a tax refund I could contribute more

Non tax payers in general are not restricted to £2880/3600 though.

You could earn say £6,000 and pay no tax and contribute £4,800 which would have £1,200 tax relief added.

It is your income which is limiting you to £2880/3600, not being a "non tax payer"