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How much to pay in for £60K max contribution this year

secondincometrader
secondincometrader Posts: 40 Forumite
Ninth Anniversary 10 Posts Combo Breaker
I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

I can then claim back any addittional tax relief later.

Have I understood this correctly? Thanks in advance
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Comments

  • I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K). Have I understood this correctly? Thanks in advance
    Yes.  Assuming you have the relevant pensionable earnings to allow this.

    NB.  Not as in you can afford to but that the rules allow such a payment
  • Thanks of the reply, would you know if there is a calculator that will tell me how much my total tax relief will be assuming a gross salary of x?
  • It's the £12k the pension company adds.

    Amy additional relief benefits you, not he pension fund and is entirely dependent on your other taxable income in the year.

    Gross salary is irrelevant for tax purposes, it's taxable pay (P60 pay figure) which is the starting point.

    You could get more than £12k in additional relief.  Or less than £2k.
  • I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

    I can then claim back any addittional tax relief later.

    Have I understood this correctly? Thanks in advance
    The maximum contribution could be higher than £60k because you can carry forward unused Annual Allowance from previous years.

    However there is also a separate limit of your relevant UK earnings for the current tax year.

    The lower of those two will be your maximum contribution.
    Fashion on the Ration
    2024 - 43/66 coupons used, carry forward 23
    2025 - 41.5/89
  • For anyone else interested I found a good tax relief calculator on the Hargreaves Lansdown site

    https://www.hl.co.uk/pensions/tax-relief/calculator
  • I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

    I can then claim back any addittional tax relief later.

    Have I understood this correctly? Thanks in advance
    The maximum contribution could be higher than £60k because you can carry forward unused Annual Allowance from previous years.

    However there is also a separate limit of your relevant UK earnings for the current tax year.

    The lower of those two will be your maximum contribution.
    I think in this case carry forward may be limited by not being a member of a pension scheme in some or all of the previous 3 tax years.
  • I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

    I can then claim back any addittional tax relief later.

    Have I understood this correctly? Thanks in advance
    The maximum contribution could be higher than £60k because you can carry forward unused Annual Allowance from previous years.

    However there is also a separate limit of your relevant UK earnings for the current tax year.

    The lower of those two will be your maximum contribution.
    I think in this case carry forward may be limited by not being a member of a pension scheme in some or all of the previous 3 tax years.
    Yes that's my understanding too
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 16,281 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 6 October 2024 am31 9:36AM
    I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

    I can then claim back any addittional tax relief later.

    Have I understood this correctly? Thanks in advance
    The maximum contribution could be higher than £60k because you can carry forward unused Annual Allowance from previous years.

    However there is also a separate limit of your relevant UK earnings for the current tax year.

    The lower of those two will be your maximum contribution.
    I think in this case carry forward may be limited by not being a member of a pension scheme in some or all of the previous 3 tax years.
    Yes that's my understanding too
    £60k in one year, which might only cost half of that after tax relief, is more than many people could dream of contributing so not a bad way to start!
  • I want to make the max contribution for this year of £60K into my SIPP. Does that mean I pay in £48K and my SIPP provider adds the £20% tax contribution of £12K (20% of £60K).

    I can then claim back any addittional tax relief later.

    Have I understood this correctly? Thanks in advance
    The maximum contribution could be higher than £60k because you can carry forward unused Annual Allowance from previous years.

    However there is also a separate limit of your relevant UK earnings for the current tax year.

    The lower of those two will be your maximum contribution.
    I think in this case carry forward may be limited by not being a member of a pension scheme in some or all of the previous 3 tax years.
    Yes that's my understanding too
    £60k in one year, which might only cost half of that after tax relief, is more than many people could dream of contributing so not a bad way to start!
    I suspect most private sector employees don’t contribute that much in ten years! 
  • NoMore
    NoMore Posts: 1,445 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Don't forget any employer contributions (if you have any, you might be self employed) count against the AA as well, so that may reduce the amount you can personally contribute.
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