Do pensions get topped up by govt?

[Huckleberries]

Looking for a straightforward answer to this question, please

I haven't worked for a while. I'm thinking of putting some money into my SIPP. It would be a small amount from a small inheritance. Probably about £10,000.

If I put that £10,000 into my SIPP, do the government literally give me 20%? I don't understand how this works. And it seems too good to be true.

There are no other calculations at play because I have not worked for a while. When I work, I am nowhere near the high tax band.

So I'm really looking for a yes or no answer - do the government give me extra money on a payment made into my pension?

If yes, how do they pay it?

Thank you if anyone can advise.

You get one tax-free allowance for each year April to April. So you can use this year's if you pay in now, and then next years on 6 April (or might be the 5th). If you're wanting to maximise tax relief you could pay in:
£2880 now
£2880 in April 26
£2880 in April 27
£1360 in April 28

My comment about 6 months is just a suggestion if you don't want to string out the process to April 28... You would miss out on £1060 in tax relief by doing it in two payments only 1 now and 1 in April 26, but:
(a) the money would be in the pension quicker and growing quicker
(b) you remove the temptation to spend it one something else in the meantime!

yes that is exactly what we are telling you
you cannot get more than £720 maximum top up by paying in more than £2,880 per tax year (when not paying income tax on earnings).

if you put all 10k in one go you will only get 720 tax relief (or free money as simplistically call it)

yo get the maximum tax relief from your 10k will take 4 tax years to do.
For the first three you pay in 2,880 per tax year and then in the 4th year you pay in the remainder. That assumes the tax rules do not change in the meantime

I think you’d be better putting it into a lifetime ISA if you have one

.

She’d still need to stagger that, though, as you can only put in up to £4,000 a year

If you invest in a normal investment account you may be able to 'bed and ISA' or 'bed and SIPP' in future years.

Thanks again

No idea what crystallising profit means

Or bed and ISA! But I have the answer to my question, so brilliant, thank you

if you drip fee each tax year for 4 years then your 10k will end up with 12,500 going into your pension pot

whether you pot's investment performance will mean the pot is worth 12,500 in 4 years time is a finger in the air guess