Tax uplift to private pension (low earner)

[MaizeAmaze]

Yes, we are exceedingly fortunate to be able to do this, especially given current cost of living rises.

My pension is non existant after 5 years living abroad, and now a low paying job (16k). But we have healthy (too high) cash levels.

Have DH and I read the rules right? If we set me up with a private pension, and put £4000 a year in it (from earnings), HMRC will top it all up by 20%, even tho I dont actually pay tax on £4000... seems too good to be true.

Yes, that’s quite correct. I’ve done it. It’s an incentive for people to save.
www.litrg.org.uk/tax-guides/tax-basics/do-i-have-join-pension-scheme/do-you-know-how-tax-relief-your-pension

Thanks Hazelnut. That link is the clearest I've seen in my hunting around for info. Looks like that's what we're doing then!

Yeah, I don't earn anything but have a private pension that the government tops up.

Well tax was paid on the money when it was received, before it went in to savings, so tax has been paid on the contribution, which is what you are claiming back

Nope, Brit. It's from my UK earnings, some of which will fall under the personal allowance, so no tax paid.
And the earnings from abroad allowing us to do this were tax free to.
I guess I'm in the minority tho, and so not worth regulating against!

If you have children under 18, you can even set up a pension for them too, and have the 20% top-up in the same way.