When Can you Pay Into a SIPP

zagubov

I’m working for a few months at the start of the new financial year, after which my salary stops and my pensions are my only income. Won’t be going in to high tax bracket. Currently receiving workplace pension and state pension, but not drawing down on my AVC.

Thinking of opening a SIPP to transfer my AVCs into.

If I decide to put some of my salary into the SIPP as well do I have to do it while I’m officially employed or can I do it afterwards but within the same financial year?

NoMore

As long as by the end of the FY you have enough relevant earned income to cover the tax relief you would receive, you can contribute any time in the FY, or you can contribute up to £2880 net (£3600 after basic tax relief added) if you have no (or <3600) relevant income.

Pension income doesn't count as relevant earned income so in your case your salary will be your relevant earned income.

Also you mention a transfer of AVC tom SIPP, transfers pension to pension don't require any earned income or tested against anything.

Albermarle

If you are receiving taxable income from your workplace pension, then the maximum you can add to a pension in a tax year is £10K, due to the MPAA limit.

That includes: any contributions, including tax relief in your current employment+ any employers contribution + any money you add to the SIPP and tax relief added.

DavidT67

https://forums.moneysavingexpert.com/discussion/comment/81941097#Comment_81941097

Though only applies if the workplace pension is a defined contribution scheme, rather than defined benefit.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81941153#Comment_81941153

That is correct, I had jumped to the assumption it was a DC scheme .

zagubov

Thanks guys. Should have said it was a DB scheme. Seem to be seeing lots of promotions pushing to transfer money into SIPPS this financial year. Not sure what advantage there is to that and happy to wait until next FY year and look into it after my work ends.

NoMore

https://forums.moneysavingexpert.com/discussion/comment/81941776#Comment_81941776

The advantage for you is that you have more relevant income this fy than next. Doesn’t matter if you don’t have available capital now to take advantage of it though.