Low Income/Tax Relief

Froggitt2

If you have a small income from employment, say £10K, but below the personal allowance, how much can you contribute to a SIPP and get 20% tax relief added? I can see that if its an employer pension, the tax relief is added, but what if its individual payments into a SIPP?

Dazed_and_C0nfused

You don't get 20% "added", it is 25%.

So in your example you can contribute £8,000 and the pension company will add £2,000 giving you a fund of £10,000 despite no tax being paid 😊.

Albermarle

The SIPP or other pension provider will automatically add basic rate tax relief. They do not check your circumstances , income etc . It is your responsibility to not add too much and end up getting more tax relief than you are  entitled to .

squirrelpie

You can contribute 80% of your gross earnings - the pension provider will add another 20% of your earnings so that you have effectively contributed 100% of your earnings for the year. It doesn't matter whether you have paid tax.