Mother's Pension

[Rothdogg]

The initial message was deleted from this topic on 21 February 2025 at 19:27

[Countdown]

The maximum you can contribute is the lower of your annual salary and £60k.

So if she's only been earning £12.5k she'll only be able to contribute £12.5k per year.

[Rufus Stone]

As above.

And why put tax free funds into a pensipn scheme where 75% is potentially taxable?

[bennno]

Rothdogg said:

My father died and my mum has received his lump sum death benefit from his employer, the money from his different pensions and also his investments that he had in Hargreaves Lansdown.

She has a very small pension from her part time job in which her salary is 12.5k. She is looking at around 400k in total that she can put into a Pension or savings.

Am I correct in thinking she can put in 200k minus her employment contributions using the unused annual allowances from this tax year and previous 3 years?

What is the most tax efficient way for her to invest most of this into her pension?

You don't specify how old your mother is - however the very last thing i'd be doing at this point would be to put any earnings in to a pension.

Her wages are so low she wont be paying any meaningful tax, the inherited cash is not restricted or subject to govt policy risk as it would be in a pension.

ISA either side of tax year end, rest in a high interest savings account for flexibility, pay off mortgage / loans etc

[Sheepshanks]

Countdown said:

The maximum you can contribute is the lower of your annual salary and £60k.

So if she's only been earning £12.5k she'll only be able to contribute £12.5k per year.

...and you've got to max out (to £60K) the current year first, which clearly she can't do.


OP - what's the £200K you're referring to?

[chip*]

Can you define the HL investments?

If the investment was ISA accounts, your mother could take advantage of the Additional Permitted Subscription rule.

Further details here for your reference.
https://www.barclays.co.uk/help/savings-and-invest...