Pension lump sum contribution

flopsy1973

Hi member of SMART salary sacrifice scheme with my current employer with salary of around 28k and on call allowance of 5k. I wish to make max lump sum contribution to my old employee scheme . What is the max I can put into this and take advantage of tax relief contribution? , do I need to allow for my salary sacrifice payments into my current scheme?

Marcon

Have a look at your previous thread from last year, which gives all the information you need (dunstonh's post of 11 November 2025 especially):

https://forums.moneysavingexpert.com/discussion/6639422/pension-avc-3-year-rule

flopsy1973

Ok I realise I can't use this carry forward rule now, so I can contribute up to my earnings level do I need to make allowance for the salary sacrifice payments that I am currently making in my current employment or deduct the tax relief I will get before calculating what I can contribute ?

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81935584#Comment_81935584

Your tax relievable pension contributions are based on your taxable earnings (or profits). If your gross salary was £30k and you sacrificed £4k of that for pension contributions to your current employer's scheme that leaves £26k of taxable earnings. If you contribute to another pension using the relief at source method then you would pay 80% of that (£20800) and the scheme would claim the basic rate relief (£5200) to give a gross contribution of £26k.

You say you plan to contribute to an old employer's pension scheme. You should check a couple of things.

1 Will they let you contribute to that scheme if you are not employed by that employer any more?

2 How will your contributions be treated? That is will the scheme treat them as relief at source contributions and reclaim the basic rate tax relief? If not then maybe pick a different pension scheme.

flopsy1973

CChecked with provider and they will accept additional contribution and claim tax relief as long as it is new money from bank account. As a basic rate taxpayer after filling the isa limit this is still a good way to shelter the money ?

Do I need to deduct the employers pension payments or just my salary sacrifice payments ?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81937144#Comment_81937144

When looking at how much you can add and get tax relief on, then you only look at your own gross salary. Which is the salary you get after the salary sacrifice reduction.

The employers contribution only becomes relevant if your contributions are large enough to be approaching the £60K annual allowance.

The annual allowance limit, and how much tax relief you can get are two separate items.

The minimum tax benefit of pension over ISA is 6.25%, for someone who pays 20% tax in employment and 20% tax when withdrawing from the pension ( the 6.25% benefit comes from the fact you can withdraw 25% of the pension tax free). If when you withdraw you are a 40% taxpayer there is a negative benefit. On the other hand if you withdraw when you are not a taxpayer the benefit is the full 20%.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81937144#Comment_81937144

You are trying to work out your taxable salary for this tax year so it is just the salary sacrifice you deduct. If you have had your March payslip then it will probably be in there.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81937144#Comment_81937144

In purely tax terms, pensions remain an excellent way to shelter money.

You are about to make a personal contribution, so you can ignore both employer and salary sacrifice payments (which are technically employer contributions) for the purposes of calculating how much you can contribute. You will be paying to a relief at source scheme, so will pay in 80% (£26,400) of your earnings in this tax year and the provider will add a 'tax top up', meaning that you've contributed the maximum 100% of your £33K pay.

That assumes:

• £28K is your post-sacrifice salary
• the on call allowance of £5K is added to your salary and taxed normally under PAYE
• you haven't previously made any personal contributions in this tax year
• all the contributions in this tax year won't exceed £60K. To be clear, that £60K includes all personal contributions + basic rate tax relief + employer contributions + salary sacrifice contributions.

flopsy1973

SSorry I'm confused it says to ignore employer and salary sacrifice payments but then DRS1 says to deduct the salary sacrifice? Have I misunderstood this

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81938179#Comment_81938179

The amount you have salary sacrificed will already have been deducted from your earnings this tax year. You don't deduct it again when calculating how much you personally can contribute.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81938179#Comment_81938179

Sorry if I have confused you. You need the salary figure on which you pay tax. That is the post salary sacrifice figure. But I did not mean to suggest you deduct the salary sacrifice figure twice!.