Can anyone help advise please on calculating 'pension input amount'?

max...

This appears to be a rather complicated calculation having already spoken to the (super helpful) Money Helper Pension Advice team and my wife's local authority pension admin team do not appear very clued up.

In short I need to calculate how much extra up to the limit she can pay into her DC pension on top of the payments already made into her DB pension (school secretary) to gain as much tax relief as possible.

She's part time and will retire this  end of tax year (April '25): full year gross salary 24/25 will be circa 14,500.  Employee pension conts' for whole year circa 900.

I believe it is along the lines of:

...the difference between your annual pension at the start and end of the pension input period. The increase between the two amounts is then multiplied by 16. 

Your pension at the start of the pension input period is increased by the rise in the Consumer Prices Index (CPI), which may reduce the tax charge. The CPI figure used is for the twelve-month period to the September before the start of the tax year of calculation. For example, if the calculation is carried out for the 2024/25 tax year, the CPI increase will be the twelve-month increase to September 2023.

???

Marcon

max... said:

This appears to be a rather complicated calculation having already spoken to the (super helpful) Money Helper Pension Advice team and my wife's local authority pension admin team do not appear very clued up.

In short I need to calculate how much extra up to the limit she can pay into her DC pension on top of the payments already made into her DB pension (school secretary) to gain as much tax relief as possible.

She's part time and will retire this  end of tax year (April '25): full year gross salary 24/25 will be circa 14,500.  Employee pension conts' for whole year circa 900.

I believe it is along the lines of:

...the difference between your annual pension at the start and end of the pension input period. The increase between the two amounts is then multiplied by 16. 

Your pension at the start of the pension input period is increased by the rise in the Consumer Prices Index (CPI), which may reduce the tax charge. The CPI figure used is for the twelve-month period to the September before the start of the tax year of calculation. For example, if the calculation is carried out for the 2024/25 tax year, the CPI increase will be the twelve-month increase to September 2023.

???

Clear explanation here: https://techzone.abrdn.com/public/pensions/guide-pension-annual-allowance#anchor_3 if you scroll down to the section headed 

DB schemes - pension input amount

Sam_666

No, its not "along the lines of".
DC contributions are limited to £60k or total taxable income of year, whichever lowest. Less any contributions already made.
I believe there is complex formula to calculate those £900 true value.

max...

Sam_666 said:

No, its not "along the lines of".
DC contributions are limited to £60k or total taxable income of year, whichever lowest. Less any contributions already made.
I believe there is complex formula to calculate those £900 true value.

For sure - I was just jotting down the very basics!  I understand the limit is to her taxable income (as noted 14,500) and that her personal contributions will be 900 but I need to know how much more (net) she can put in up to her 14,500 limit.

QrizB

max... said:

Sam_666 said:

No, its not "along the lines of".
DC contributions are limited to £60k or total taxable income of year, whichever lowest. Less any contributions already made.
I believe there is complex formula to calculate those £900 true value.

For sure - I was just jotting down the very basics!  I understand the limit is to her taxable income (as noted 14,500) and that her personal contributions will be 900 but I need to know how much more (net) she can put in up to her 14,500 limit.

14500 - 900 = 13600

13600 x 0.8 = 10880

So, she can add 10880 to a RAS pension and receive 2720 in tax relief, making her gross contribution 13600.

Dazed_and_C0nfused

QrizB said:

max... said:

Sam_666 said:

No, its not "along the lines of".
DC contributions are limited to £60k or total taxable income of year, whichever lowest. Less any contributions already made.
I believe there is complex formula to calculate those £900 true value.

For sure - I was just jotting down the very basics!  I understand the limit is to her taxable income (as noted 14,500) and that her personal contributions will be 900 but I need to know how much more (net) she can put in up to her 14,500 limit.

14500 - 900 = 13600

13600 x 0.8 = 10880

So, she can add 10880 to a RAS pension and receive 2720 in tax relief, making her gross contribution 13600.

But the op said the taxable income was £14,500.

So presumably it was earnings of £15,400 before the net pay contributions.

Although things have changed looking at the original post when the earnings were only £14,500.

max...

But it's no way near as simple as that is it?

https://techzone.abrdn.com/public/pensions/guide-pension-annual-allowance#anchor_3

zagfles

You don't need to know the pension input amount. That's needed for the annual allowance, which is £60k plus carry forwards, on a salary of £14.5k she's not going to get anywhere near it even if she maxes out the tax relief, unless very unusual circumstances. Tax relief limit is 100% of earnings. 

We get a similar thread every week here. 
Calculator giving zero DB Input - Can I put all my earnings into a SIPP? — MoneySavingExpert Forum
Annual Allowance - SIPP — MoneySavingExpert Forum

Dazed_and_C0nfused

zagfles said:

You don't need to know the pension input amount. That's needed for the annual allowance, which is £60k plus carry forwards, on a salary of £14.5k she's not going to get anywhere near it even if she maxes out the tax relief, unless very unusual circumstances. Tax relief limit is 100% of earnings. 

We get a similar thread every week here. 
Calculator giving zero DB Input - Can I put all my earnings into a SIPP? — MoneySavingExpert Forum
Annual Allowance - SIPP — MoneySavingExpert Forum

For most people with a straightforward job it's taxable earnings 

The op is getting mixed up between earnings/salary and taxable earnings.

Earnings/salary is not relevant in this situation.

QrizB

max... said:

But it's no way near as simple as that is it?
https://techzone.abrdn.com/public/pensions/guide-pension-annual-allowance#anchor_3

It really is as simple as that, for someone who is in no danger of reaching the £60k Annual Allowance.

The only question we've got is whether your wife's salary is £15400, with £900 of pension contributions, or if it's £14500 with £900 of mension contributions. I've assumed the latter in my calculation.

max...

OK, my apologies guys - very happy to see it is simpler. 

From her most recent statement (10 months of 12) showing year to date: gross is 12464.92, taxable pay is 11779.38, tax paid 49.20, pensionable pay as per gross and employee conts to date 685.54.

I am also able to pass over to her my unused allowance under the married allowance.