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Did you know you can still contribute to your private pension even if you’ve stopped working or retired? Not only can you contribute but you can also receive tax relief.


How can you contribute?


When you pay into a pension the government automatically adds 20 percent to your contribution in the form of a tax refund. To receive this tax relief, you can only contribute as much as you earn each tax year, or £3,600, whichever is greater.


If you are no longer working or work part-time you are still able to take advantage of the contribution limit of £3,600. This limit is your gross contribution, which means it includes the tax relief you receive. This essentially means if you contribute £2,880 to your pension you will receive a 20 percent (£720) contribution from a government tax rebate despite no longer earning.


Are there any restrictions?


You can receive tax relief on pension contributions until the age of 75. Even if you have already taken flexible income from your pension scheme, such as through a lump sum or through income drawdown, you can still contribute to your pension and receive tax relief. However, once you have taken more than your 25 percent tax-free pension commencement lump sum you have a limit of £4,000 that can be contributed back in to your pension each tax year.


How would it work?


  • You are aged below 75, retired and have started drawing on your pension
  • You have surplus funds and want to invest
  • You can add £3,600 to your pension each tax year
  • You would only have to contribute £2,880 and you would get £720 tax relief


Did you know that not only can you top up your own pension in retirement, but you can pay in to someone else’s pension and they will receive tax relief? You can find out more about the benefits of contributing to someone else’s pension here.


Useful links

Tax relief on your pension contributions

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