Pension or no pension!?

CBDTADI

Good evening, I was reading through the MSE site regarding pensions and I'm now somewhat confused. I came across a FAQ saying

"If you’re over 55 and have taken income from your pension, you can only contribute up to a maximum of £10,000 a year, or 100% of what you earn, whichever is lower. This is to stop you taking large amounts from your pension and then putting it back in to get tax relief. But even if you're earning less than this (or nothing at all) you can still get tax relief on up to £3,600 a year".

I'm 60.

Left the military and fire service and now drawing a pension from these former employments.

I retrained and now self employed as a driving instructor. 

I also have an income from rental properties. 

Can I open a private pension (not SIPP) to invest towards full retirement to coincide with my state pension? 

Smudgeismydog

Yes you can

Sounds like you have Defined Benefit pensions in payment, so you won’t be restricted to the £10,000. Instead, your contributions will be restricted to earnings from your self employment (not rental income).

SacredStephan

I think the OP quoted para 4 from here:
https://www.moneysavingexpert.com/pensions/how-pensions-work/#need-16

MSE could have worded it more accurately. It doesn't refer to "taking income" from a DB pension.

LHW99

Smudgeismydog said:

Yes you can

Sounds like you have Defined Benefit pensions in payment, so you won’t be restricted to the £10,000. Instead, your contributions will be restricted to earnings from your self employment (not rental income).

Note that in this case the "earnings" figure is your profit from self-employment, not your overall turnover.

xylophone

See

https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/tax-relief/tax-relief-member-pension

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

Note that neither rental income nor pension income count as relevant earnings 

Re MPAA

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/money-purchase-annual-allowance-mpaa

You have accessed income from Defined Benefit Schemes so that MPAA does not apply.

Income from your self employment as a driving instructor counts as relevant earnings.

Remember that you make a net contribution to a SIPP.

For example, relevant earnings £20,000 - personal contribution up to  £14,400 - provider claims up to £3.600 and adds it to the pot.

Dazed_and_C0nfused

xylophone said:

See

https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/tax-relief/tax-relief-member-pension

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

Note that neither rental income nor pension income count as relevant earnings 

Re MPAA

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/money-purchase-annual-allowance-mpaa

You have accessed income from Defined Benefit Schemes so that MPAA does not apply.

Income from your self employment as a driving instructor counts as relevant earnings.Remember that you make a net contribution to a SIPP.For example, relevant earnings £20,000 - personal contribution up to  £14,400 - provider claims up to £3.600 and adds it to the pot.

But it could also be a net contribution of £16,000 with £4,000 in basic rate relief being added by the pension company.

You don't have to pay £4,000 in tax to get this pension tax relief.  But even if you have funds available from other sources you do need to have profits of £20,000 to contribute £20,000 (gross).

CBDTADI

Thanks to all replies, much appreciated!