Max cash pension contribution

[ywouldi]

Hi all,

I'm struggling to work out what the max net input I can put into a SIPP is. My accountants say they cannot advise on pensions and there isn't much online.

What is the maximum amount of cash I can put into a private pension?

If I put £32,000 in, that brings me to the £40,000 limit. Then I can claim back higher rate relief and I think additional rate relief and receive this as a refund from HMRC. Is it as simple as that?

I think I am treating the refund as another contribution to the pension where it seems be be treated outside of that system, as the basic rate relief is automatically put into the pension fund.

Thanks,

[PistonHead007]

Without any carry forward annual allowance and assuming you have at least £40k of earnings the maximum is £40k gross.

Paid in by your employer it usually goes in gross as the full £40k.

Paid in by you as a personal contribution you always pay in 80% of the gross amount, the pension scheme claims the 20% relief and that goes into the pension so you end up with £40k inside. Any higher or additional rate tax relief you get back through a tax return and that money goes in your pocket, not the pension. In essence, you have to front 80% of the £40k but in the end it costs you less.

[Crumpet]

Presumably you can only save the NI if it’s a salary sacrifice scheme?

[PistonHead007]

Yes. When it's salary sacrificed it never gets assessed for NI. Employer contributions are a form of additional pay also not subject to NI. Sadly you cannot reclaim NI on personal pension contributions.