Can a DB pension income count towards earned income for annual allowance contributions ?

CRAIGSVILLE1

Hi all,

My OH will have a small army DB pension ( £5K ) in a few years when she is 60 . 
She will be working until she is 63 with her self employed job, and would like to put the maximum into her personal SIPP, from her earnings. ( £10K profit after expenses p.a approx.) 
Can the £5k army DB pension count as earnings for the year to put towards her SIPP, or would it just be her profit from her self employed job ? £8K + £2K uplift she can put in ?

Thanks

Dazed_and_C0nfused

No, pension income isn't counted when establishing what can be paid into a pension.

Using your example she would be limited to £10k (gross)

CRAIGSVILLE1

Thanks for your quick answer :-) - I kind of thought that 

Dazed_and_C0nfused

It will of course help her to be able to afford to add the vast majority of her profit and not be on the breadline!!

squirrelpie

I had a thought, and I don't know the answer. CRAIGSVILLE1 said "her earnings. ( £10K profit after expenses p.a approx.)" but what limits your pension contributions? Is it your earnings before or after expenses?

Dazed_and_C0nfused

After expenses.

https://techzone.abrdn.com/public/pensions/Guide-Individuals-Contributions

Marcon

squirrelpie said:

I had a thought, and I don't know the answer. but what limits your pension contributions? Is it your earnings before or after expenses?

It's pre-tax profits for self employed/sole trader. Some good clear info here to add to previous answers: https://www.onlinemoneyadvisor.co.uk/pensions/self-employed-pensions/sole-trader-pensions/