Question re SIPP, £2880 to £3600, and age 75.

harz99

Hi my wife will reach age 75 in August 2023, she has only state pension and around £1k of savings interest as her own annual income, and as each tax year starts she contributes £2880 + £720 tax relief into a SIPP with HL.

Neither of us are sure as to when her final contribution to gain the £720 can be made under the age 75 rule.

My interpretation is because she is not 75 until the August, her final contributions can be made in that year between April and her birthday in August as she will be age 74.

My wife seems to think the age 75 limit is governed by the tax tear she becomes 75 in, and that would mean her final contribution can only be made before the 23/24 tax year starts on 6th April 2023?

Could any of our pension experts clear the fog for us please ?

Dazed_and_confused

You are correct.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

Has your wife applied for Marriage Allowance? Unless she had an extremely large State Pension she can probably do this and remain a non tax payer.

If doing this means her savings interest will then have to be taxed (rather than be covered by her Personal Allowance) the good news is it will currently be taxed at the savings starter rate of 0%.

harz99

Dazed_and_confused wrote: »

You are correct.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

Has your wife applied for Marriage Allowance? Unless she had an extremely large State Pension she can probably do this and remain a non tax payer.

If doing this means her savings interest will then have to be taxed (rather than be covered by her Personal Allowance) the good news is it will currently be taxed at the savings starter rate of 0%.

Yes she has applied for MA, and yes she is still a non tax payer, thanks for the link.