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How much can i pay into a SIPP?
zolablue25
Posts: 1,652 Forumite
If I wanted to pay a lump sum from my savings how much would I be allowed to pay in to a SIPP and still get a tax benefit from all of the payment?
If I earn £30K is the limit I can pay:
£30K-Personal Tax allowance-company pension payments?
Thanks
If I earn £30K is the limit I can pay:
£30K-Personal Tax allowance-company pension payments?
Thanks
0
Comments
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Potentially £30k (you paying £24,000 and the SIPP provider adding £6,000 basic rate tax relief).
Is the £30k your taxable wage i.e. P60 value?
Do you pay into a pension with your employer?0 -
tax allowance doesn't come into it. If you earn £30k then £30k can go into pension regardless of the fact that you didn't pay tax on £11.5k of it. some of that from you and some in tax relief
it applies across all pensions combined.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Yes I pay into a company pension scheme. Its a basic one whereby I pay the minimum amount required for a workplace pension (3%) and my company pays the minimum they need to plus 1% (so, also currently 3%). And, yes, the £30k is my P60 total
So, in the example given, I can pay £24K minus my and my employers contributions to a company pension approx £1800 (if my maths is right). So I could pay a sum of £22200 and the SIPP provide would add £4400?
MallyGirl, are you saying the same thing, but in a different way? i.e. the total in would be £30K or I can pay £30K and get 20% on top of that (excluding the company pension for simplicity)?
Edit: My maths isn't right is it. I need to work backwards from £30K. So take the 1800 off the 30 leaving 28,200. This would be the total I could pay in when you add on the 20% so £23500?0 -
Your employers contribution isnt included in the £30k. So you can contribute £30k- your contribution to your employers scheme. You do that by actually paying 80% of the amount into the SIPP. HMRC will add the missing 20%.0
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Your employers contribution isnt included in the £30k. So you can contribute £30k- your contribution to your employers scheme. You do that by actually paying 80% of the amount into the SIPP. HMRC will add the missing 20%.
Great thanks.
So, £30,000 - £900 = £29100 total
So my contribution would be (29100/120)*100 = £24,250
HMRC contribution = £4850
Got it. Thanks
Ah, just one more thing (I think I watched too much Columbo as a kid). Can I pay in one lump at any time during the year or must it be at year end or in monthly installments?0 -
If you aren't a higher rate payer then a SIPP contribution doesn't normally save you any income tax (you get the basic rate tax relief added to your pension fund but it doesn't affect your own tax liability) but if you are resident in Scotland for tax purposes and earning the amount you are referring to then you get a little bonus in 2018/19
https://www.gov.uk/government/publications/pension-schemes-relief-at-source-for-scottish-income-tax-newsletter-february-2018/pension-schemes-relief-at-source-for-scottish-income-tax-newsletter-february-20180 -
So my contribution would be (29100/120)*100 = £24,250
HMRC contribution = £4850
No, if you are contributing £29,100 then you pay £23,280 and the pension provider adds £5,820 basic rate tax relief. I think you have got confused with the 20% tax relief at source amount.0 -
Dazed_and_confused wrote: »So my contribution would be (29100/120)*100 = £24,250
HMRC contribution = £4850
No, if you are contributing £29,100 then you pay £23,280 and the pension provider adds £5,820 basic rate tax relief. I think you have got confused with the 20% tax relief at source amount.
I certainly have! Didn't realise there was a difference, despite being told in a previous thread about it! (it didn't sink in)
Got it now, thanks0
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