RE: Price...9 Jul 2019 11:11
apologies for typing and pressed post too sooon
sipp continued
While there is no limit on the amount you can save into your pensions each tax year, there is a limit on the total amount of contributions that can be paid before a tax charge might apply. It is also a limit on the amount of tax relief you can receive on any personal contributions. This is based on your own contributions, any employer contributions and any contributions made on your behalf by someone else.
In the current tax year (2019/20), the standard annual allowance is £40,000 for most people. The annual allowance applies across all your pension savings (excluding State Benefits), not per scheme. If the contributions to your pensions exceed the annual allowance, a tax charge ('the annual allowance charge') may become payable. This effectively claws back any excess tax relief given at source. If your taxable earnings in the year are below the annual allowance then tax relief on pension contributions from all sources is limited to 100% of your earnings (or to £3,600 if you have no earnings).
Your annual allowance may be reduced if you’ve already taken taxable money from your pension pot using the pension freedoms (known as the money purchase annual allowance) or have income of more than £110,000 a year (known as the tapered annual allowance). It may also be possible to contribute more than your annual allowance and still benefit from the tax relief by using unused allowance from up to the three previous tax years (known as carry forward).
Overview
You don’t have to start taking money from your pension pot when you reach your ‘selected retirement age’ (the age you agreed with your provider to retire). You could leave the money invested, eg while you’re working.
The money in your pot could grow.
You could have more money to last a shorter length of time.
Tax
You don’t pay tax while the money stays in your pot.
Money you leave in your pot can be passed on tax free if you die before the age of 75
Continuing to pay in
You (and your employer) can continue to pay into your pot but there may be restrictions.
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