Tax relief on pension contributions please help....

[yoyo1234]

Hello , I wondered if I earned £10000 in a tax year and paid it into a pension would I get 20 %tax relief despite being under the personal allowance for income tax. Likewise if I earnt ,£20000 could I invest all £20000 in a pension scheme and get The full 20% tax relief ?

You pay it in net of tax so to get 10k in, you pay £8k and the government top it up to 10k. The fact you've not actually paid tax is irrelevant. It is 'free' money and one reason why pension saving can be very efficient.

Same to get in £20k, pay it net of basic tax so 16k in, tax reclaimed by pension provider = £20k.

That’s not correct.
If you don’t earn enough to pay income tax, then the maximum amount that you can get tax relief on is £2880 - so that’s topped up to £3600.

You can put more in, but you won’t get any more tax relief on it, so you’re better off putting it in an ISA and then using that to pay into your pension later if you start earning above the threshold.

You can pay your full earnings in - that’s not a problem - but you won’t get tax relief on it.

Note that it does have to be earned income. You couldn’t take £10K of a partner’s income and pay it into your pension and get tax relief.

Ellis I can assure you the LAW allows 100% of UK relevant earnings or 3600. Whichever is greater.

Are you a qualified pension adviser? No, I thought not. You are wrong.

Thank you. I thought it was up to whatever you earn ( though not more than £40000 a year).

No I’m not a qualified pension’s adviser, but it’s what my IFA who is a qualified pensions advisor told me. I didn’t pay much attention on that as it doesn’t currently apply to me, so I checked .gov.uk before posting:

www.gov.uk/tax-on-your-private-pension/pension-tax-relief

Happy to be corrected if I’m wrong, but if I am, I don’t think the government website wording is very clear.

Ugh - autocorrect, pensions not pension’s!

Tax relief
You can get tax relief on private pension contributions worth up to 100% of your annual earnings.

Above quote is direct from the government website.

Ellis if you are earning money you have tax free allowances, but you are a tax payer. You can pay in every single penny (net) into a pension. I am absolutely sure of it.

yoyo it is, as long as you don't earn over £110k and then there's lots of other rules too.