Max contributions to SIPP for very low earner

the_cat

Hi again all
Quick question as I'm struggling to find the answer to this one. OH due to retire next week, overall finances very good so I'm looking only to maximise tax efficiency rather than build myself a nest egg

I know I can invest £2880 in a SIPP and get a £720 tax kickback. All good. However as I have a small part time job earning circa £6000pa I can't work out if I can save more into SIPP and get tax relief at source on a higher amount. I'm pretty sure my employer can't pay in direct as although hourly rate is above minimum wage, overall salary is low......(is that right?) So does that mean I could pay into it myself direct?

It seems unlikely that I can get tax relief on tax I'm not paying:), but thought it worth a check before I discount it!

We are going to go through the the whole shebang with an IFA very soon, so this is prep work to make sure I'm asking the right questions when there.

xylophone

However as I have a small part time job earning circa £6000pa I can't work out if I can save more into SIPP and get tax relief at source on a higher amount.

You could pay up to £4800 into a personal pension/SIPP/stakeholder and the provider would claim up to £1200 from HMRC and add it to your pot.

xylophone

Does your employer offer a workplace pension? Is it "relief at source"?

https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

the_cat

xylophone wrote: »

Does your employer offer a workplace pension? Is it "relief at source"?

https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

No it's a tiny firm so AFAIK don't need to as yet. Besides at my yearly salary I was under the impression they wouldn't need to contribute (under £10k I thought they weren't required to?)

mark55man

You are wrong to think you can't do it. You are allowed to claim relief of income which is taxable (ie is part of your gross income that would be compared against your personal allowance). EVEN if you don't exceed your PA and therefore don't pay an actual penny to HMRC

It surprised me when I found out - see https://forums.moneysavingexpert.com/discussion/5935454/pension-input-calculations-number-check-please

Ignore my initial post which was barking, and then review zagfiles and albermarle's laser like analysis

xylophone

No it's a tiny firm so AFAIK don't need to as yet. Besides at my yearly salary I was under the impression they wouldn't need to contribute (under £10k I thought they weren't required to?)

See the link for details.