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Maximum pension contribution for a low earner?
So salary £20000 this year and total pension contributions, including tax relief and employer contributions = £3000.
To make it easy say that salary and contributions were the same for the last 5 years, what is the maximum I can put into a pension this year?
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£20000 as that is what you earned.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
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Carry forward is in the title of your thread but it is of no relevance to you as you haven't got enough income for it to be of use in the current tax year.0
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Amended - thanksDazed_and_C0nfused said:Carry forward is in the title of your thread but it is of no relevance to you as you haven't got enough income for it to be of use in the current tax year.
MallyGirl said:£20000 as that is what you earned.
But what about contributions already made? Are they ignored?
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£20,000 in total, including those contributions you have already made. You can not pay in more that you earn. Your employer contributions are not relevant to this limit. If your Gross earnings at £20,000, to can contribute £20,000 gross (or £16,000 net before tax relief)paulfaz said:
MallyGirl said:£20000 as that is what you earned.
But what about contributions already made? Are they ignored?
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But what about contributions already made? Are they ignored?
No. You personally may make a gross contribution of up to £20,000 to your pension.
If you have already made a gross contribution of (say) £2000, you may make a further gross contribution of up to £18,000.
Thus, suppose you are in a "relief at source" scheme.
That £2000 would represent a payment from your post tax income of £1600 plus the tax relief claimed by the pension provider of £400.
You could then make an additional payment of £14,400 to the scheme and the provider would claim tax relief of £3,600.
£1600 + £400 + £14,400 + £3,600 = £20,000.
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