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4.4 Contribution Limits and Tax Relief

  • Contributions may be made by both individuals and/or their employers where appropriate, in addition to any payments by the DWP, (N.I Rebate), if the scheme is used to contracted out.

  • The maximum permissible contribution for any tax year including employer contributions and contributions related life assurance, are as follows:

    • Age at 6 April
    (NRE)    		 % Net Relevant Earnings
    Up to age 35
    17.5%
    36-45
    20%
    46-50
    25%
    51-55
    30%
    56-60
    35%
    61+
    40%

    N.B.

    1. From 6th April 2001, up to 10% of contribution may be paid towards life assurance and/or dependants' pensions on death before retirement. For pre 6th April 2001 policies the limit continues to be 5% of net relevant earnings.
    2. Where the personal pension is used to contract out of S2P, the DWP contributions are in addition to the above.
    3. Earnings cap applies.

  • The self employed and employees pay contributions net of basic rate income tax and higher rate taxpayers claim any additional tax relief due in their returns. Employers can deduct contributions as a business expense for corporation tax purposes.

  • The maximum permissible contributions that may be made into existing RACs are as follows:

    • Up to age 50
    17.5% of NRE
    age 51 to 55
    20% of NRE
    age 56 to 60
    22.5% of NRE
    age 61 to 74
    27.5% of NRE

  • Where an individual has a PPP and an RAC contract in force, and makes a payment in the same tax year to each, the overriding limit will be the PPP limit.

  • All contributions must be paid gross to retirement annuity contracts

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