Paying into pension when retired

Mick70

Morning
Already posted recently about my wife retiring end of March this year .

My query was
I am aware you can still pay into a pension when retired , however I am unsure if you can pay in £3.6k (incl tax relief) or £10k  ?
Also, is it worth doing so , are there benefits in doing this compared to paying that money into a S+S ISA instead , I realise you get tax relief added, but then it is taxed on the way back out ?

Finally,  if her pension is with vanguard do you contact them to say retiring (unsure how works) and do you contact HMRC 

thanks all,
Mick 

Dazed_and_C0nfused

Mick70 said:

Morning
Already posted recently about my wife retiring end of March this year .

My query was
I am aware you can still pay into a pension when retired , however I am unsure if you can pay in £3.6k (incl tax relief) or £10k  ?
Also, is it worth doing so , are there benefits in doing this compared to paying that money into a S+S ISA instead , I realise you get tax relief added, but then it is taxed on the way back out ?

Finally,  if her pension is with vanguard do you contact them to say retiring (unsure how works) and do you contact HMRC 

thanks all,
Mick 

If she has no earnings for pension contribution purposes in a tax year then the maximum will be £3,600 (inclusive of the basic rate tax relief the pension company adds).

There is often a 6.25% benefit from the pension over an ISA (basic rate tax relief on the way couples with only 75% being taxable when taken out).

ColdIron

Mick70 said:

Also, is it worth doing so , are there benefits in doing this compared to paying that money into a S+S ISA instead , I realise you get tax relief added, but then it is taxed on the way back out ?

If she has no earned or pension income she could have up to her whole £12,570 personal allowance to use. Tax relief on the way in and no tax upon withdrawal. I'd call that worth it

Albermarle

Finally,  if her pension is with vanguard do you contact them to say retiring (unsure how works) and do you contact HMRC 

Vanguard will add 25% basic tax relief to every contribution. It is up to you/your wife not to add more/get more relief than you are entitled to. So no need to contact them until you/your wife actually wants to start withdrawing from the pension.

With HMRC, there is no need for her to contact them regarding pension contributions, just because she will have retired. However it would probably a good idea for her to check her personal tax account online a few weeks after her employment has terminated. Just to make sure the employer has informed HMRC that the employment is finished.
As she is retiring before the end of the tax year, she will probably have paid too much tax in previous months and may well be due a rebate. If she does not do self assessment, then any overpaid tax will be calculated automatically sometime in Q4 2026. Or if it is a significant amount you might want to try and  claim it earlier.

Mick70

sorry, I didn't explain well - she is self employed and a low earner , she will never be claiming extra tax relief on pension, just the standard 20%.  I was just unsure if you had to inform hmrc retiring regardless.

Dazed_and_C0nfused

Mick70 said:

sorry, I didn't explain well - she is self employed and a low earner , she will never be claiming extra tax relief on pension, just the standard 20%.  I was just unsure if you had to inform hmrc retiring regardless.

If she's ceasing to trade whe will need to answer the relevant question about this on the self employment pages of her tax return.