To SIPP or not to SIPP?

Albermarle

TMSG said:

Hm... now I am again confused. I have trouble understanding what @tacpot12 meant when they wrote that I get tax relief on the £2880... is that simply the £720 the gov pays in?

At any rate... if @Albermarle is right and there's no tax relief for the £2880 I pay in then potentially a SIPPer pays taxes twice: first when they put in their contribution which according to @Albermarle has been taxed normally and then again when they take out the 75% which are not tax free. In my case that would probably be OK as I still have some personal allowance buffer but for my wife this looks a lot less attractive as she now pays taxes (basic rate) and will continue to do so when she a pensioner.

I did not say that .
If you are a non earner, then you can add £2880 and £720 tax relief is added ( where the £2880 originates from is not relevant) 
If you earn more than £3600, then you can add more to your pension and get more tax relief. So if you earned £10,000, you could add £8000 and £2000 tax relief would be added ( even though you never paid any tax on your earnings).

For your wife, as she will pay 20% tax on 75% of the pension, then the tax benefit is 6.25% overall. 
For you it will be a lot higher.