Now I've retired, trying to decide if I should pay anything more into my DC pension this tax year.

disgruntled1234

Good morning all.

As I've posted elsewhere in these forums, I retired with effect from 30th September this year at age 56.  Based on the following figures, if I decided to pay anything more into my SIPP, what would the maximum amount be?

Tax year 2025/2026

Gross Salary - £24,968.34 (only worked 6 months of this tax year)

Taxable amount - £15,910.80

Total pension contributions (including company) - £12,905.31.

I've already claimed back £1,256.20 as a tax refund and that was paid on 10th November.

Just seems silly not to claim tax relief on any other contributions for this year.  Next year, I will start paying in £2,880.00 per annum as I won't be working at all.

I have taken a few small tax free lump sums this year, but the money I would potentially be paying back into my pension would come from savings, not from those tax free lump sums.

I've not started drawdown yet (but intend to do so starting from April next year), so haven't triggered the MPAA as yet.

Many thanks for any help.

I did feed all of this into ChatGPT, but the result wasn't 100% clear

disgruntled1234

I should clarify, what I'm really asking is how much more can I contribute, to receive tax relief at 20% on top of that contribution

Dazed_and_C0nfused

disgruntled1234 said:

Good morning all.

As I've posted elsewhere in these forums, I retired with effect from 30th September this year at age 56.  Based on the following figures, if I decided to pay anything more into my SIPP, what would the maximum amount be?

Tax year 2025/2026

Gross Salary - £24,968.34 (only worked 6 months of this tax year)

Taxable amount - £15,910.80

Total pension contributions (including company) - £12,905.31.

I've already claimed back £1,256.20 as a tax refund and that was paid on 10th November.

Just seems silly not to claim tax relief on any other contributions for this year.  Next year, I will start paying in £2,880.00 per annum as I won't be working at all.

I have taken a few small tax free lump sums this year, but the money I would potentially be paying back into my pension would come from savings, not from those tax free lump sums.

I've not started drawdown yet (but intend to do so starting from April next year), so haven't triggered the MPAA as yet.

Many thanks for any help.

I did feed all of this into ChatGPT, but the result wasn't 100% clear

Do you mean your P45 showed your taxable income to when you stopped being employed as £15,910.80?

And we're any of the contributions you have made this tax year made using the relief at source contribution method?

Relief at source is where you pay the net amount and the pension company adds 25% (which is 20% of the gross contribution).

disgruntled1234

Hi @Dazed_and_C0nfused .  

My P45 shows "Total pay to date" as £15,910.80

My company operated a salary sacrifice scheme so I received tax relief at source as my own SIPP contributions were taken off my gross salary and so tax and NI was calculated on what was left.

Triumph13

In that case your maximum contribution is £15,910.80 gross - so you can pay 80% of that figure into a SIPP and have it made up to that by the tax relief.

dunstonh

Triumph13 said:

In that case your maximum contribution is £15,910.80 gross - so you can pay 80% of that figure into a SIPP and have it made up to that by the tax relief.

Correct but just adding the clarification that £15,910.80 is the gross figure minus contributions already paid in the tax year.  Post#1 indicates contributions have been made.

disgruntled1234

Thank you all.  Yes, my gross contribution to my pension from this year (mine and my company's contribution) is £12,905.31, so I from what you're saying, I would take this amount off £15,910.80 (equals £3,005.49) and then be able to pay 80% of this amount back into my pension and they would then add 20/25% to that figure?

So a rough calculation would be me paying in £2400.00 (roughly 80% of £3,005). However, in the past, HL have topped any lump sum payments I've made by 25%, so wouldn't I need to pay in less than £2,400.00?

Dazed_and_C0nfused

dunstonh said:

Triumph13 said:

In that case your maximum contribution is £15,910.80 gross - so you can pay 80% of that figure into a SIPP and have it made up to that by the tax relief.

Correct but just adding the clarification that £15,910.80 is the gross figure minus contributions already paid in the tax year.  Post#1 indicates contributions have been made.

I don't think the op has actually paid anything into a pension yet this tax year. 

The do suggest they have contributed but then refer to salary sacrifice and getting tax relief so I suspect they simply don't understand what is actually happening and the end result is going to be no personal contributions so far.

Dazed_and_C0nfused

disgruntled1234 said:

Thank you all.  Yes, my gross contribution to my pension from this year (mine and my company's contribution) is £12,905.31, so I from what you're saying, I would take this amount off £15,910.80 (equals £3,005.49) and then be able to pay 80% of this amount back into my pension and they would then add 20/25% to that figure?

So a rough calculation would be me paying in £2400.00 (roughly 80% of £3,005). However, in the past, HL have topped any lump sum payments I've made by 25%, so wouldn't I need to pay in less than £2,400.00?

You seem to be getting a bit confused.

Have you really contributed to a pension and received tax relief 🤔

Or have you sacrificed some salary in return for additional employer contributions?  There is no tax relief available to you on employer contributions as you haven't paid them.  You do of course avoid paying both tax and NI on salary you didn't get.

Until you can clarify that it's impossible to know how much you can now contribute.

af1963

Did you also receive any taxable "benefits in kind"  (normally reported on a P11D each year) ? If so, you can add those to the gross salary when working out how much you can pay in.

najan49

disgruntled1234 said:

Thank you all.  Yes, my gross contribution to my pension from this year (mine and my company's contribution) is £12,905.31, so I from what you're saying, I would take this amount off £15,910.80 (equals £3,005.49) and then be able to pay 80% of this amount back into my pension and they would then add 20/25% to that figure?

So a rough calculation would be me paying in £2400.00 (roughly 80% of £3,005). However, in the past, HL have topped any lump sum payments I've made by 25%, so wouldn't I need to pay in less than £2,400.00?

The company’s contribution is not relevant here, what is relevant is any contributions you have made personally which have received tax relief (ie not salary sacrifice)