Pensions transfer, SIPP & ISA

NannaH

If you have had no earnings this tax year then all you can put into a pension is £2880, which then gets uplifted to £3600.

The method of getting your tax free cash in stages is called UFPLS and you can either take it monthly ( if the pension allows) or quarterly / twice yearly etc.

You can also get the £720 tax relief money out tax free each year for a nice little bonus or simply leave it to build up. 

If you put £2880 in now, ( take it from your ISA or other savings) you can do the same after 6 April next year then every April till you are 75.  Tax relief is normally added within a few weeks.

xylophone

In your first post you said

I am now effectively retired as unable to find a job at 62.

You are indicating that you have no relevant earnings?

If so, tax relief will only be available  on a contribution of up to the basic amount (£3600 gross).

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/tax-relief-and-your-pension

You would make a net payment of up to £2880 to  the provider of the personal pension and relief of up to £720 would be claimed and added to your pot.

RobieTheRobot

QrizB said:

RobieTheRobot said:

UPDATE to this discussion.

I have just phoned one of my pension provider to ask how much can I contribute to this pension even though I am not working and I have started a drawdown income from my lower value 2nd pension.

They tell me that I can contribute up to £10,000 per annum into my larger pension as long as the money is coming from my bank account. This was a surprise since from above msgs, it seemed to be "£2880 each year". 

Please let me know I have got it anything wrong. 
Thanks

Do you have earnings exceeding £10k pa that you declared to your pension provider but haven't mentioned here?

• If so, they are correctly quoting the new MPAA.
• If not, they seem to have answered the wrong question and the answer is still £2880.

From the second bulllet point link:

The annual allowance is currently £60,000 for most people.

However, you can also only receive tax relief up to 100% of your earnings.

So if your earnings are lower than £60,000 you'll be entitled to tax relief only up to the amount you earn. If you earn less than £3,600, you can pay in up to £2,880 and still get tax relief.

No, I don't. So effectively, I can only contribute £2880 per year.

RobieTheRobot

Albermarle said:

RobieTheRobot said:

UPDATE to this discussion.

I have just phoned one of my pension provider to ask how much can I contribute to this pension even though I am not working and I have started a drawdown income from my lower value 2nd pension.

They tell me that I can contribute up to £10,000 per annum into my larger pension as long as the money is coming from my bank account. This was a surprise since from above msgs, it seemed to be "£2880 each year". 

Please let me know I have got it anything wrong. 
Thanks

You could add up to £10,000, but most of it would not be eligible for tax relief.
Worth noting two problems with this 
1) As you get taxed on withdrawals, then with no tax relief going in, it would not be a very good idea
2) Most pension providers are not able to accept contributions that are not eligible for tax relief.

If you made it clear to the person you spoke to that you had no taxable income, then this should have made  clear to you . However pension call centre staff have varying levels of knowledge/experience.

You are absolutely correct. The person I spoke too wasn't too clear on things and looking up most of the time. 

So, I will contribute £2880 each year. In any case, I won't much more than that to contribute.

RobieTheRobot

Thank you all who commented on my post. Extremely useful and you guys have more knowledge than the people who actually work for the pension company.

The sum of it all is that maximum I can contribute is up to £2880 per year. 

Thank  you all once again - very much appreciate all your comments & ideas.