Personal Pension Contributions - what counts towards the absolute limit

Qyburn

Hi.  Sorry to pop back in with another basic question.  For the workplace defined benefit pension, does the PIA count only towards the Annual Allowance, and not towards the Tax Relief Limit?  And following on from that, assuming that's correct, then it could be carried forward from previous years.

Thanks again.

MX5huggy

Yes if you’ve made no new contributions to that DB. 

Albermarle

SpeedSouth said:

NedS said:

Qyburn said:

Sorry, just realised I'm not totally clear on the Personal Pension side.  To give an example using round numbers if I earn £30K and my employer has put in £3,000 then is the limit for my contributions £30K?  Meaning that my contributions don't exceed my earnings, and the total of my contributions and my employer's don't exceed the £40K AA.

Correct.

Your earnings limit is £30k, so you cannot contribute more than you earn (gross). The AA limit is £40k for all contributions, which would be you contributing up to your gross earnings of £30k and your employer contributing £3k giving a total of £33k, which is within the £40k limit so you are fine.

Does this not mean that the OP is then putting £33K into their pension whilst only earning £30K?  I thought that employers contributions should be included in the £30K maximum not on top of?

As explained by Neds you are confusing two limits. As an example .
You could earn £10K - max you can add is £10K gross, but your employer could add £25K if they were feeling generous( unlikely scenario but just to make a point)

SpeedSouth

Albermarle said:

SpeedSouth said:

NedS said:

Qyburn said:

Sorry, just realised I'm not totally clear on the Personal Pension side.  To give an example using round numbers if I earn £30K and my employer has put in £3,000 then is the limit for my contributions £30K?  Meaning that my contributions don't exceed my earnings, and the total of my contributions and my employer's don't exceed the £40K AA.

Correct.

Your earnings limit is £30k, so you cannot contribute more than you earn (gross). The AA limit is £40k for all contributions, which would be you contributing up to your gross earnings of £30k and your employer contributing £3k giving a total of £33k, which is within the £40k limit so you are fine.

Does this not mean that the OP is then putting £33K into their pension whilst only earning £30K?  I thought that employers contributions should be included in the £30K maximum not on top of?

As explained by Neds you are confusing two limits. As an example .
You could earn £10K - max you can add is £10K gross, but your employer could add £25K if they were feeling generous( unlikely scenario but just to make a point)

Understood. Ultimately 40k is the max though regardless? My employer contributes 40k per year via SS, but clearly I can't add more unless I pay tax bills have carry over avaliable. 

How does this work for DB pensions?  For my missus I've taken the 1200 her employer pay off her 12k salary and paid the gross difference into a SIPP.

Could she actually put the full 12k into her SIPP.