Additional pension contributions and tax relief?

dave_hendy

I am a bit confused about how much extra my wife can pay into her pension?

My wife earns £30k pa and pays in £100 per month, her employer pays £75 per month and she gets £25 tax relief making £200 per month or £2400 pa. We have just added £20k as a lump sum, plus the £4K tax relief making a total of £26,400 with both amounts. So I take it she can only pay another £3600 in this year?

Or can she pay more, as she only paid in less than £2400 last year and the same the year before?

We want to pay in as much as possible without going over any limits? Can someone clarify this?

BoGoF

Essentially you are correct the maximum (gross) she can pay and get tax relief is the £30k.

Technically she can pay more but wouldn't get tax relief....so pretty pointless.

zagfles

Is the work pension is a RAS scheme, ie where the contribution is deducted after tax and the scheme claims the tax relief? So the pension statements show tax relief being claimed?

The lump sum doesn't make sense - if she contributed £20k net the tax relief should be £5k. If she contributed £20k gross then either she'd have paid in £16k plus tax relief £4k claimed by the scheme, or paid in £20k gross and got £4k refunded to her not the pension.

zagfles

BoGoF wrote: »

Essentially you are correct the maximum (gross) she can pay and get tax relief is the £30k.

Technically she can pay more but wouldn't get tax relief....so pretty pointless.

But he's included employer contributions, which don't count towards the 100% of earnings limit.

BoGoF

zagfles wrote: »

But he's included employer contributions, which don't count towards the 100% of earnings limit.

Good point......shouldn't skim read.

dave_hendy

zagfles wrote: »

Is the work pension is a RAS scheme, ie where the contribution is deducted after tax and the scheme claims the tax relief? So the pension statements show tax relief being claimed?

The lump sum doesn't make sense - if she contributed £20k net the tax relief should be £5k. If she contributed £20k gross then either she'd have paid in £16k plus tax relief £4k claimed by the scheme, or paid in £20k gross and got £4k refunded to her not the pension.

We paid £20k so tax relief on top of that.

dave_hendy

The main question is can she pay in more this year as she paid in so little in the past?

zagfles

dave_hendy wrote: »

We paid £20k so tax relief on top of that.

If you paid £20k net, the tax relief would have been £5k. Or did you mean £20k gross (you pay £16k, £4k tax relief).
Either way your figures are wrong, so need correcting for a correct answer to your question.

dave_hendy

zagfles wrote: »

If you paid £20k net, the tax relief would have been £5k. Or did you mean £20k gross (you pay £16k, £4k tax relief).
Either way your figures are wrong, so need correcting for a correct answer to your question.

£20k net. Sorry for the confusion

NoMore

dave_hendy wrote: »

The main question is can she pay in more this year as she paid in so little in the past?

No the limit is the amount she earned, so at most 30k in this instance doesn't matter about past years contributions

dave_hendy

NoMore wrote: »

No the limit is the amount she earned, so at most 30k in this instance doesn't matter about past years contributions

Okay, that’s a shame! Didn’t think about paying more in previous years as we were concentrating on my pension.