Power up your pension in 2024

Woman drinking from a mug looking at her phone

Did you know that you can make one-off pension payments at any time? In fact, people are encouraged to do so with tax incentives offered by the government. If you have accumulated extra money from a windfall, bonus or through saving, why not consider powering up your pension with a single contribution?

Crunch the numbers

Tax relief is available on contributions up to a maximum of £3,600 a year or 100% of earnings, whichever is greater, with the level of relief dependent on a person’s marginal rate of Income Tax. For instance, a £1,000 lump sum contribution could effectively cost a higher rate taxpayer just £600, after receiving £200 basic rate tax relief from the government and claiming £200 in additional relief from HMRC.

Allowances

During the 2023/24 tax year, the annual contribution limit for tax relief purposes is 100% of a person’s salary or £60,000, whichever is lower, although unused allowance from the previous three tax years can be carried forward.

Future focus

Paying a lump sum into a pension can be an effective way to save for your future. Making a single contribution basically enables people to go above and beyond their regular commitments and move closer to achieving their pension saving goals. If you want to make the most of your available allowance(s), we can help you power up your pension.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 12/01/2024

The value of investments and pensions and the income they produce can fall as well as rise. You may get back less than you invested

Taxation advice is not regulated by the Financial Conduct Authority.

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