Adding to Pensions for non tax payers

gazza26

I wonder if anyone can help me.

I am a non tax payer, I have a stakeholder pension to which I pay the maximum £2880 a year to get  full tax relief.  I do work but only part time and I don't reach the thresholds required for the company pension fund. 
What I want to do is pay more into a pension but fully appreciate that I won't get any tax relief, but I can't find one.  Is there pension fund that doesn't insist you get tax relief? Or does anyone know of another way I can save more of the family income into a pension fund for me. 
I want to reduce the family "income" so my son doesn't get a reduced student grant which I will have to top up anyway. (Student loans have more of a chance on getting money back from my child than I ever will!  )
My husband does earn more but I have maxed out all his pension options.   
Also as it it, I will not get taxed, all things remaining the same in 13 years time, on my state pension and a small additional pension I have.  So it would be sensible as a family long term, to add more to my pension fund so I have bigger and  independent fund, and will be able to use my personal tax allowance in full. 
Any help of advise would be much appreciated.

MallyGirl

You can contribute up to your earnings (gross) and get tax relief even if you have paid no tax. Eg if you earn £10K, pay no tax, you can contribute £8k in total to pensions (assuming no employer contribution) and get £2k tax relief

gazza26

MallyGirl said:

You can contribute up to your earnings (gross) and get tax relief even if you have paid no tax. Eg if you earn £10K, pay no tax, you can contribute £8k in total to pensions (assuming no employer contribution) and get £2k tax relief

So there is a difference because I actually earn the money?

thank you MallyGirl,

So there is a difference because I actually earn the money? 

My stakeholder pension that I set up when I was a stay at home mum, only lets me have tax relief on £2880 because I wasn't earning any income?

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

That would be a great solution to my problems!

Dazed_and_C0nfused

gazza26 said:

MallyGirl said:

You can contribute up to your earnings (gross) and get tax relief even if you have paid no tax. Eg if you earn £10K, pay no tax, you can contribute £8k in total to pensions (assuming no employer contribution) and get £2k tax relief

So there is a difference because I actually earn the money?

thank you MallyGirl,

So there is a difference because I actually earn the money? 

My stakeholder pension that I set up when I was a stay at home mum, only lets me have tax relief on £2880 because I wasn't earning any income?

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

That would be a great solution to my problems!

You seem to have invented a rule that doesn't exist!

How much do you think your P60 will show you have earned in the current tax year?

Albermarle

The £2880/£3600 is the max you can add for non earners.

People who have earned income above £3600 pa can add their full income to a pension ( gross) regardless of whether they actually pay any tax or not.

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

So for example if you earned £7000 and had already added the £3600 , you could then add another £3400 gross.
So in practice you could add £2720 and £680 tax relief would be added.

What I want to do is pay more into a pension but fully appreciate that I won't get any tax relief, but I can't find one. 

There is no point adding to a pension if you do not get tax relief, as the pension is partly taxable on withdrawal.
If you have more funds available above your gross earnings, then it would be better to put them in a Stocks and Shares ISA. Or a LISA if you are under 40.

gazza26

Dazed_and_C0nfused said:

gazza26 said:

MallyGirl said:

You can contribute up to your earnings (gross) and get tax relief even if you have paid no tax. Eg if you earn £10K, pay no tax, you can contribute £8k in total to pensions (assuming no employer contribution) and get £2k tax relief

So there is a difference because I actually earn the money?

thank you MallyGirl,

So there is a difference because I actually earn the money? 

My stakeholder pension that I set up when I was a stay at home mum, only lets me have tax relief on £2880 because I wasn't earning any income?

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

That would be a great solution to my problems!

You seem to have invented a rule that doesn't exist!

How much do you think your P60 will show you have earned in the current tax year?

oh sorry, I am just trying to clarify what the rules actually are!  My P60 will say £6000. 

ColdIron

gazza26 said:

Dazed_and_C0nfused said:

gazza26 said:

MallyGirl said:

You can contribute up to your earnings (gross) and get tax relief even if you have paid no tax. Eg if you earn £10K, pay no tax, you can contribute £8k in total to pensions (assuming no employer contribution) and get £2k tax relief

So there is a difference because I actually earn the money?

thank you MallyGirl,

So there is a difference because I actually earn the money? 

My stakeholder pension that I set up when I was a stay at home mum, only lets me have tax relief on £2880 because I wasn't earning any income?

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

That would be a great solution to my problems!

You seem to have invented a rule that doesn't exist!

How much do you think your P60 will show you have earned in the current tax year?

oh sorry, I am just trying to clarify what the rules actually are!  My P60 will say £6000. 

So you can add £6,000 gross, You've already contributed £3,600 (£2,880 + £720) so you can add £2,400 gross (£1,920 + £480)

gazza26

Albermarle said:

The £2880/£3600 is the max you can add for non earners.

People who have earned income above £3600 pa can add their full income to a pension ( gross) regardless of whether they actually pay any tax or not.

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

So for example if you earned £7000 and had already added the £3600 , you could then add another £3400 gross.
So in practice you could add £2720 and £680 tax relief would be added.

What I want to do is pay more into a pension but fully appreciate that I won't get any tax relief, but I can't find one. 

There is no point adding to a pension if you do not get tax relief, as the pension is partly taxable on withdrawal.
If you have more funds available above your gross earnings, then it would be better to put them in a Stocks and Shares ISA. Or a LISA if you are under 40.

So it bares no relevance how little or no tax I pay, I will still get tax relief on all the payments I make to a pension fund providing it doesn't go over 100% of my total pay.  

DeLaSole

Hi gazza,

Completely understand thinking you would be limited to £3600 gross as a non tax payer. A couple of people I know who earn about £10k per year thought they were limited to £3600 gross pension conts. after reading the government website section for non tax payers : https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

But, as said, that's not the case and you can contribute more if you earn over £3600, as guided above, regardless of whether or not you pay tax.

Best wishes.

ColdIron

gazza26 said:

Albermarle said:

The £2880/£3600 is the max you can add for non earners.

People who have earned income above £3600 pa can add their full income to a pension ( gross) regardless of whether they actually pay any tax or not.

So if I put in a lump sum of whatever I have earned over £3600(2880 plus the tax relief) then I am still legally entitled to tax relief on the additional amount?  

So for example if you earned £7000 and had already added the £3600 , you could then add another £3400 gross.
So in practice you could add £2720 and £680 tax relief would be added.

What I want to do is pay more into a pension but fully appreciate that I won't get any tax relief, but I can't find one. 

There is no point adding to a pension if you do not get tax relief, as the pension is partly taxable on withdrawal.
If you have more funds available above your gross earnings, then it would be better to put them in a Stocks and Shares ISA. Or a LISA if you are under 40.

So it bares no relevance how little or no tax I pay, I will still get tax relief on all the payments I make to a pension fund providing it doesn't go over 100% of my total pay. 

As long as the gross payments don't go above your earnings but broadly, for you, yes

There are some other limits such as the £60,000 Annual Allowance and if you pay higher rate tax you can only receive relief to the extent that you've paid it. But none of that applies to you so you can ignore it

Dazed_and_C0nfused

DeLaSole said:

Hi gazza,

Completely understand thinking you would be limited to £3600 gross as a non tax payer. A couple of people I know who earn about £10k per year thought they were limited to £3600 gross pension conts. after reading the government website section for non tax payers : https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

But, as said, that's not the case and you can contribute more if you earn over £3600, as guided above, regardless of whether or not you pay tax.

Best wishes.

That guidance is poor and has been questioned but it's the opening line that people should focus on 

You can get tax relief on private pension contributions worth up to 100% of your annual earnings.