Interesting question. I asked CharGPT on your behalf (assumed your DB work pension was 4% of your salary which I think is the norm for auto-enrolment). This was what ChatGPT said:
Since you are in a defined benefit (DB) pension scheme and contributing 4% of your £12,500 salary (£500 per year), your total pension contributions are relevant for tax relief purposes. However, your contributions to the DB scheme do not reduce the amount you can personally contribute to a Self-Invested Personal Pension (SIPP).
Maximum SIPP Contribution with Tax Relief
• Your total relevant earnings: £12,500
• Maximum gross personal contributions eligible for tax relief: £12,500
• Your DB scheme contributions (4%): £500 (these do not count against your personal limit)
• Therefore, your maximum personal SIPP contribution (gross): £12,500
• Since SIPPs receive 20% tax relief, you only need to pay in £10,000, and the government will add £2,500, bringing it up to £12,500
Key Points to Note:
1. Tax relief still applies: Even though you don’t pay income tax, you still receive the 20% basic rate tax relief on SIPP contributions up to your earnings limit (£12,500).
2. DB pension contributions don’t reduce your SIPP allowance: Your £500 DB contributions don’t count against your SIPP limit but do count toward your £60,000 annual allowance (which isn’t an issue here).
3. Total pension contributions:
• DB Scheme (your 4%): £500
• SIPP (your £10,000 + £2,500 tax relief): £12,500
• Total pension savings per year: £13,000 (including employer contributions, which don’t affect your personal tax relief).
Can You Contribute More?
No—your total gross personal contributions (DB + SIPP) cannot exceed your £12,500 earnings. If you contribute more than this, the excess won’t receive tax relief and may need to be refunded.