Adding money to Private Pension in retirement.

Storeman232

Hi, I am in retirement and get state pension and an annuity (the annuity is taxed).
I also have another small private pension pot which I have taken some the money out of in the past. I would like to top up this one.
I am a non-earner and understand that I can pay in up to £2,880 each tax year and the government will automatically add up to £720 (20% tax relief) on top (total £3,600). 
Can somebody explain how this works please.
Do I have to pay in the full £3,600 and would then get a tax rebate; or pay in £2.880 and then the government  adds in £720?
How would the government know that I have topped up this pension pot.
Appreciate any info - thanks!

Dazed_and_C0nfused

Storeman232 said:

Hi, I am in retirement and get state pension and an annuity (the annuity is taxed).
I also have another small private pension pot which I have taken some the money out of in the past. I would like to top up this one.
I am a non-earner and understand that I can pay in up to £2,880 each tax year and the government will automatically add up to £720 (20% tax relief) on top (total £3,600). 
Can somebody explain how this works please.
Do I have to pay in the full £3,600 and would then get a tax rebate; or pay in £2.880 and then the government  adds in £720?
How would the government know that I have topped up this pension pot.
Appreciate any info - thanks!

This would be a relief at source (RAS) contribution and there is no connection between the tax you do or don't pay and the pension tax relief.

You pay over the net amount (£2,880) and the pension company obtains the £720 from HMRC and adds that to your pension, making a gross contribution of £3,600.

Other than paying the £2,880 you are not involved in that process, the pension company sorts it.

Albermarle

The pension provider will automatically add basic rate tax relief to any contribution you make. It is up to you to not to add more than £2880. If you added more, you will get more tax relief than you are entitled to, but sometime down the line it will be spotted and it can be a mess unwinding it all.

xylophone

Are you aged under 75?

Marcon

Storeman232 said:

Hi, I am in retirement and get state pension and an annuity (the annuity is taxed).
I also have another small private pension pot which I have taken some the money out of in the past. I would like to top up this one.

Will the provider let you do so? If not, it's easy enough to set up a new personal pension and pay into that.

Storeman232

I would like to thank all of you who replied to my post.
It is much appreciated - the information was exactly what I needed.
Thanks all!