How much can I contribute?

Most people under 75 are eligible to contribute to a SIPP. Each year you can normally save as much as you earn (effectively capped at £235,000 in 2008/09 tax year) into a pension including a SIPP. For instance if you earn £50,000 a year you can contribute up to £50,000 gross (£40,000 net) into all your pension plans combined in the 2008/09 tax year.

For extra help you can use our contribution and tax relief calculator.

Contribution & tax relief calculator

Use our interactive guides to check you’re eligible to contribute and how much tax relief you could receive.

The earnings on which you can base your contribution are known as Relevant UK Earnings. So if you are employed this would generally be your salary plus any taxable benefits. If you are self employed, this would normally be the profit you make (after any adjustments) for UK tax purposes.

Even if you have no Relevant UK Earnings – maybe you are retired or not working, you can still contribute up to £3,600 (£2,880 excluding tax relief in 2008/09 tax year).

Lifetime allowance... When contributing to a pension you should be aware of the lifetime allowance. The lifetime allowance is currently set at £1.65 million for the 2008/09 tax year and is set to rise each year until at least 2010. If your pension fund exceeds the life time allowance when you take retirement benefits you are likely to incur a tax charge on the excess. If you have a large pension fund and are unsure whether or not this will affect you please call 0800 138 2121 for more details.