Making contributions to your SIPP

‘Adjusted income’ is your income before tax – including dividends, savings interest and rental income – plus your employer pension contributions. 

This is different to ‘threshold income’ which is your annual income before tax, minus personal and employer pension contributions. 

If your annual ‘threshold income’ is below £200,000, you will not have a reduced annual allowance. If it is over £200,000, you will need to check your ‘adjusted income’. 

You can set up regular investing using your SIPP account. 

Regular investing allows you to buy investments monthly with no trading fees. You can invest as little as £25 per month and change or stop your investments at any time. 

You can pay for your regular investments by setting up Direct Debit payments to your SIPP or by using the available cash in your account. 

You can still contribute up to £3,600 a year to your pension if you are not earning. You can pay in up to £2,880 and receive a maximum of £720 tax relief. 

If you have started taking a taxable income from your pension, your annual allowance is reduced to £4,000 per tax year.

You can contribute more than your annual allowance, but you cannot claim tax relief on contributions which exceed your annual allowance. 

If you claim tax relief on contributions which exceed your annual allowance, you may be subject to an annual allowance charge. The excess money will be added to your taxable income for the tax year. You will need to declare this when completing and submitting your self-assessment tax return to HMRC.

However, your annual allowance could be more than £40,000 if you qualify for "carry forward".

You can still contribute up to £4,000 per tax year to your SIPP if you have taken a taxable income from your pension. 

If you have only taken your tax-free lump sum or a small pots lump sum, you are still able to pay in up to 100% of your earnings into your SIPP and receive tax relief up to that level (up to the current maximum annual allowance of £40,000). 

There is no minimum contribution amount for your SIPP.

The most you can add to a SIPP in each tax year is £40,000. You may be able to add more than £40,000 in a tax year if you qualify for ‘carry forward’. 

There is also a lifetime allowance for the total value of your pensions. This is currently £1,073,100.

You can continue to receive tax relief on your SIPP contributions until you reach the age of 75. After that, you can still contribute but will no longer receive the benefits of tax relief.

If you do not start withdrawing a regular income, you can continue to contribute up to £40,000 a year to your SIPP until you turn 75.

After you have started income drawdown, your annual allowance for contributions is £4,000. You can choose to start income drawdown at any time after reaching the age of 55 (57 from 2028).

Anyone else can contribute to your pension if they wish to. 

Contributions from someone other than your employer are treated as if you made the contribution yourself. This means that you will receive the tax relief at your own rate. These contributions will also count towards your annual allowance. 

To arrange for some else to contribute to your SIPP you will need to complete an ii SIPP contribution form.