Max SIPP contribution in year of retirement from Civil Service

Catflap2

If I retire from the Civil Service part way through a year, can I check how much can be put into a SIPP that year. So if my gross pay for the year to date was £10000 and I had contributed £500 to Alpha and my employer contributions from my payslip show £2500 what can I save in a SIPP? I assume it’s £5600 ( 80% of £7000) but would just like to be sure. Thanks.

hugheskevi

You can put in up to the amount of your taxable earnings, ie, gross pay less alpha pension contributions (assuming here there isn't any like salary sacrifice for bicycles, etc, being deducted from your pay).

To do this, you would contribute 80% of that figure and the provider would gross it up to account for basic rate tax relief.

The employer contribution is irrelevant.

So if your gross pay was £10,000 and you had contributed £500 to alpha, you could put £9,500 into a SIPP and receive tax relief. To do this you would contribute a net amount of £9,500 x 80%=£7,600 and the provider would add £1,900 of basic rate tax relief.