Paying into a pension without working

Albermarle

Mr_Countdown said:

Many thanks Dazed_and_C0nfused and Albermarle for your replies. And thanks for correcting me on the figures.
I an retiring/resigning at the end of April 2022 so will have had a full years worth of wages for 21/22.
For some reason I thought I had to be 55 or over to do it tho?

You will also have a months wages in tax year 22/23 . So you could contribute all of April 22 salary gross, or £3600 gross in 22/23 , whichever is the highest .

You can start taking a pension currently at age 55 ( if you want to ) , this has no effect on contributions .

xylophone

You don't have to be over 55 to take advantage of tax relief on pension contributions.
Take a new born who has no 'relevant earnings" at all.

His parents could open a personal pension on his behalf and contribute up to £2880 - the pension provider would claim up to £720 in tax relief and add it to the child's pot.

Age 55 relates to the earliest age (currently) that most people can access their pension.

 A person aged under 75 who has no relevant earnings can still take advantage of pension tax relief but only in a limited way.

He may contribute up to £2880 to a personal pension and up to £720 will be claimed by the pension provider and added to his pot.

It would appear that you have relevant earnings considerably in excess of £3,600!

You may already have been making pension contributions but perhaps not to the maximum permitted.

You have time before 6 April to made an additional contribution up to the permitted amount.

You will have a salary for one month of the new tax year.  Will it be greater or less than £3,600 gross?

Mr_Countdown

Thanks Albermarie and Xylophone for your replies. Xylophone yes my salary for my last month will be around £1000 (last salary sacrifice of £1000) coming out of that payslip. I will however also get around £500 in May as work are buying out my accrued leave.
Does that mean I'm limited to £1350 (£2880 - £1500) contribution? Sorry I'm not good at working this out!!

xylophone

Does that mean I'm limited to £1350 (£2880 - £1500) contribution? Sorry I'm not good at working this out!!

No, a person with no relevant earnings or  relevant earnings under £3,600 (gross) may still make a net payment of  up to £2880 to a personal pension/SIPP/stakeholder and receive tax relief of  up to £720. 

Albermarle

xylophone said:

Does that mean I'm limited to £1350 (£2880 - £1500) contribution? Sorry I'm not good at working this out!!

No, a person with no relevant earnings or  relevant earnings under £3,600 (gross) may still make a net payment of  up to £2880 to a personal pension/SIPP/stakeholder and receive tax relief of  up to £720. 

But the OP will have added £1000 to their pension by sal sac in April 2023 ( and maybe £500 in May ) . So can they  then add another £2880 still on top of that ?

zagfles

Albermarle said:

xylophone said:

Does that mean I'm limited to £1350 (£2880 - £1500) contribution? Sorry I'm not good at working this out!!

No, a person with no relevant earnings or  relevant earnings under £3,600 (gross) may still make a net payment of  up to £2880 to a personal pension/SIPP/stakeholder and receive tax relief of  up to £720. 

But the OP will have added £1000 to their pension by sal sac in April 2023 ( and maybe £500 in May ) . So can they  then add another £2880 still on top of that ?

Yes, sal sac is employer contributions. You don't get (direct) tax relief on employer contributions so they are irrelavent for the tax relief limit.

If the workplace scheme was "net pay", then would probably need to deduct workplace contributions. Although this might be debatable if OP doesn't end up using his personal allowance.