Pension contributions into wife's plan

LV_426

My wife doesn't work. She has an existing pension which she stopped contributions to in 2003.
I believe if she makes contributions into the plan, she gets basic rate tax added @ 20%
So is there a limit?
If not, then what's stopping me from giving her say £10k. That means a total of £12.5k into the fund with the tax added.

NannaH

She can only pay £2880 in, which gets topped up to £3600.  

LV_426

NannaH said:

She can only pay £2880 in, which gets topped up to £3600.  

That's what I thought. Who checks this though? The pension provider will quite happily allow me to type any amount in, and adds on the 20%.

NoMore

LV_426 said:

NannaH said:

She can only pay £2880 in, which gets topped up to £3600.  

That's what I thought. Who checks this though? The pension provider will quite happily allow me to type any amount in, and adds on the 20%.

Its not on the Pension Provider to check, that's down to you. HMRC will likely catch it at some point as the pension company will be reporting what it claims from them and also HMRC will be aware of how much money you have earned.

Dazed_and_C0nfused

LV_426 said:

NannaH said:

She can only pay £2880 in, which gets topped up to £3600.  

That's what I thought. Who checks this though? The pension provider will quite happily allow me to type any amount in, and adds on the 20%.

If the pension provider doesn't ask them HMRC will easily be able to identify that she doesn't have earnings to allow that level of contribution.

LV_426

I see thanks. So the £2880 limit is an allowance for me to contribute on her behalf. Oh well it's still worth doing.

NoMore

Its not your allowance, its her's your merely providing the money for her to use it.

MK62

LV_426 said:

NannaH said:

She can only pay £2880 in, which gets topped up to £3600.  

That's what I thought. Who checks this though? The pension provider will quite happily allow me to type any amount in, and adds on the 20%.

HMRC......they know how much your wife earns in the tax year, if anything, and therefore how much she can contribute and receive tax relief on....

Dazed_and_C0nfused

LV_426 said:

I see thanks. So the £2880 limit is an allowance for me to contribute on her behalf. Oh well it's still worth doing.

No, it's her allowance.  And your choice if you wish to gift £2880 to her.

Grumpy_chap

Dazed_and_C0nfused said:

No, it's her allowance.  And your choice if you wish to gift £2880 to her.

I am currently looking to do this for my wife.  She is not currently working.

I just want to understand how the £2,880 (£3,600) is impacted if she gets a job?
Easy if she gets a job, say 1st July and then works through to the end of the tax year.  Contributions capped at annual earnings (she won't be near annual allowance).

What if she pays in the £2,880 now but gets a job in, say, March 2023 so only one month's earnings before the end of the tax year?  Pension contributions exceed total earnings.  Is that allowed?

NoMore

She will be fine, the limit is for earnings up to 3600, obviously above that you then just have your actual earnings to use for your contribution limits.

So if you earn 2000 you can still put in the 2880 (grossed up to 3600)