Sorting my wife's pension for remaining working years

BoGoF

tigerspill wrote: »

I cant believe you can get the "tax back" on money where you haven't even paid tax. Happy days! £2500 for nothing at all (other than tying the cash up).

Even those with no earned income can pay £3600 (£2880) net and get tax relief of £720.

tigerspill

BoGoF wrote: »

Even those with no earned income can pay £3600 (£2880) net and get tax relief of £720.

I sort of knew about that but hadn't looked into this as it isn't for me at the minute. I hadn't twigged at all about the 20% tax relief where 0% tax was due).

So basically you can put 80% of your gross into a SIPP. This is grossed up in the SIPP. As a BRT payer anyway.

soulsaver

tigerspill wrote: »

Thanks for this.
So (assuming the maths is right) - She puts £28723.80 into a Sipp and this is grossed up by the SIPP platform to the £35904.76.

Note maths is fine - AlanP's copying is screwed £39772 has morphed to £39722..
If all otherwise good, £35954..;)

soulsaver

tigerspill wrote: »

Do you know what rate they offer? 0%?

From memory, yep, but not done the digging yet.
Seem to remember AJ Bell was a bit better but other costs incurred so needs bottoming.

tigerspill

soulsaver wrote: »

From memory, yep, but not done the digging yet.
Seem to remember AJ Bell was a bit better but other costs incurred so needs bottoming.

The thing is that this money is savings anyway so if we didn't put it in a SIPP, we would likely put it in a savings account which loses to inflation anyway. Might as well have the 25% tax bump.

tigerspill

AlanP_2 said:

Employers contributions don't impact on the level of personal contribution in this situation AFAIK.
Total Gross - Employees Contribution (which give or take £4 comes back to the Taxable Gross.
So for 20/21 Tax Year:
39722.92 - 3818.16 = £35, 904.76 gross in to pension, and 80% of that is £28,723.80 nett contribution.
Please double check my maths!
NOTE - This must be contributed before the end of the Tax Year.

Hi,
In the scenario where this pension is a Defined Benefits, should the amount she can put into the SIPP be the Total Gross minus the "Pension Input Amount" rather than the actual employee contributions value?

Thanks

AlanP_2

tigerspill said:

AlanP_2 said:

Employers contributions don't impact on the level of personal contribution in this situation AFAIK.
Total Gross - Employees Contribution (which give or take £4 comes back to the Taxable Gross.
So for 20/21 Tax Year:
39722.92 - 3818.16 = £35, 904.76 gross in to pension, and 80% of that is £28,723.80 nett contribution.
Please double check my maths!
NOTE - This must be contributed before the end of the Tax Year.

Hi,
In the scenario where this pension is a Defined Benefits, should the amount she can put into the SIPP be the Total Gross minus the "Pension Input Amount" rather than the actual employee contributions value?

Thanks

I don't believe the PIA becomes relevant until Annual Allowance becomes an issue so in your case it is the monetary contribution rather than the DB growth AFAIK.

You could always call HMRC and ask.