Paying a lump sum into my pension

VincentHanna

Thanks everyone for all the helpful advice - appreciate it. 

Based on this I will add 25K to my pension pot for 24/25 and for 25/26. Doing it this way I will get the 20% tax relief and be within my allowance for both years. 

For 24/25 - 42612 is total allowance available. Take away 9923 (pension contributions) = 32689 used. So within allowance to top up by 25K for this year. 

Next year 25/26 - 42612 is total allowance available. This year I'm planning to contribute 30% of my salary to my pension which works out to be 12,783. Take away employer contribution of 5% (2130). In terms of contribution towards allowance this will be 14913. 42612 - 14913 = 27699. So for this year able to make an additional payment of 25K and still be within my allowance. 

Qyburn

VincentHanna said:

Next year 25/26 - 42612 is total allowance available. This year I'm planning to contribute 30% of my salary to my pension which works out to be 12,783. Take away employer contribution of 5% (2130). In terms of contribution towards allowance this will be 14913. 42612 - 14913 = 27699. So for this year able to make an additional payment of 25K and still be within my allowance. 

Employer contributions are irrelevant to the tax relief limit.

If you earn £42,612 and have already contributed £12,783 (gross) then you can add up to a further  £29,829 (also gross).  By which I mean you could pay £23,863.2 from your savings and the scheme will add tax relief of £5,965.8.

Employer contribution is only relevant to the Annual Allowance.