Non-earner, pensions allowance - pro rata'd for part year?

v1ckyt

Hi there, 

My husband retired from his job last summer, early due to ill health. I understand that he can still put up to £2,880 into a private pension and claim the tax relief on it, topping it up to £3,600.

My questions however is, as he retired in July, part way through the financial year, does he still have the full year's allowance, or because he paid into an occupational pension from April to July, does his allowance reduce?

And if so, is it reduced by how much he paid into the Occ pension, or does he lose 4/12ths for the 4 months he was technically employed?

Hoping someone can help, thanks in advance,

Vicky 

molerat

How much you can pay in is based on total income for the year, not how many months / weeks he worked.

v1ckyt

Ah right, he was just paid for the annual leave he had accrued, so income was approx £2,500 for those 4 months. any idea what that would leave him able to contribute please?

molerat

He is limited to £3600 gross, as that is higher than his income, less any contributions he made into a pension.

So (£3600 - gross pension contributions) X 0.8

af1963

also depends how his work pension contributions were paid - if they are salary sacrifice, they are employer contributions and don't count towards his personal contribution limit.

v1ckyt

af1963 said:

also depends how his work pension contributions were paid - if they are salary sacrifice, they are employer contributions and don't count towards his personal contribution limit.

Would that show on his final payslip please?

molerat said:

He is limited to £3600 gross, as that is higher than his income, less any contributions he made into a pension.

So (£3600 - gross pension contributions) X 0.8

Thanks, that makes sense