Who can pay contributions to my InvestEngine Pension Plan?
At present, we only accept personal contributions paid by you.
In order for you to be able to gain tax relief on your personal contributions you need to be a UK resident or you have relevant UK earnings chargeable to income tax and are under age 75.
Will I receive tax relief on my contributions?
Contributions paid to your InvestEngine Pension Plan are treated as being paid net of basic rate income tax. Once received we will make a claim to HMRC to have the basic rate of income tax that you paid on the net contribution paid to your InvestEngine Pension Plan. For example, if you want to pay a gross contribution of £10,000, you would pay a net contribution of £8,000 and HMRC would pay £2,000 to your pension.
You will need to claim any additional tax relief you may be entitled to in your self assessment tax return. There is no tax relief for such contributions on or after your 75th birthday.
Please note that it can take between 6 and 11 weeks for HMRC to send us your basic rate tax relief.
Is there a limit on the amount of tax relief that I can receive?
You will only get tax relief on your personal contributions in a tax year provided the total gross amount (this being the net amount that you paid in and the corresponding basic rate of income tax relief) does not exceed the greater of (i) £3,600 and (ii) the amount of your relevant UK earnings chargeable to tax for that tax year.
What is your annual allowance?
Your annual allowance is the limit on the amount of pension savings that can be made to all your pension schemes in a tax year before you have to pay tax on them. So, if the total gross amount of contributions in a tax year to the InvestEngine Pension Plan and any other registered pension schemes (including benefit increases in defined benefit schemes where relevant) exceed your available annual allowance, money purchase annual allowance or tapered annual allowance, whichever is/are applicable, you will be subject to a tax charge.
The annual allowance for the current, and previous three tax years are shown below.
| Tax year | Annual Allowance | |
|---|---|---|
| 2024/25 | £60,000 | |
| 2023/24 | £60,000 | |
| 2022/23 | £40,000 | |
| 2021/22 | £40,000 |
Your annual allowance might be lower if you have flexibly accessed your pension pot or you a high income.
Flexibly accessing your pension pot means that you have received taxable income from a pension or purchased an annuity. If this is the case your annual allowance for the current, and previous three tax years are shown below.
| Tax year | Money purchase annual allowance |
|---|---|
| 2024/25 | £10,000 |
| 2023/24 | £10,000 |
| 2022/23 | £4,000 |
| 2021/22 | £4,000 |
If you are a high earner you can assess your tapered annual allowance (known as your tapered annual allowance) via this link.
Can I carry forward any unused annual allowances on my pension savings?
If you have used up all of your annual allowance or tapered annual allowance in a tax year, it may still be possible for further contributions to be made in that year provided you have unused annual allowance or tapered annual allowance available from one or more of the immediately preceding three tax years to carry forward to the tax year in question and you were a member of a registered pension scheme in each relevant year.
As mentioned earlier, full tax relief will only be available on contributions paid in a tax year by you provided your relevant UK earnings for that tax year are at least equal to the amount of those contributions. Carry forward is not available if the money purchase annual allowance applies.
How is the available annual allowance used up?
The annual allowance for the current tax year is used first.
The unused annual allowance from the previous tax years is then used, beginning with available unused annual allowance from the earliest tax year first.
Example 1
Frederick (aged 25) opened his InvestEngine Pension Plan in the 2024-25 tax year. This was his first pension account and he is not a high earner.
The annual allowance for 2024-25 is £60,000.
As Fredick was not a member of a registered pension scheme in any of the previous three tax years he doesn’t have the ability to carry forward unused annual allowance.
Example 2
Sally (aged 39) has been a member of a registered pension scheme for 10 years and she is not a high earner.
The annual allowance for 2024-25 is £60,000 and, as Sally has been a member of registered pension scheme, she can carry forward available unused annual allowance from the previous three tax years.
In the previous three tax years her pension input amounts were:
2023-24 - £15,000 (annual allowance for this tax year was £60,000)
2022-23 - £12,000 (annual allowance for this tax year was £40,000)
2021-22 - £10,000 (annual allowance for this tax year was £40,000)
Sally has unused annual allowance from those three tax years of:
2023-24 - £45,000 (annual allowance for this tax year was £60,000)
2022-23 - £28,000 (annual allowance for this tax year was £40,000)
2021-22 - £30,000 (annual allowance for this tax year was £40,000)
This means Sally has £103,000 unused annual allowance to carry forward to 2024-25, as well as the annual allowance for the 2024-25 (£60,000).
Please note though that relief is permitted provided the total gross amount does not exceed the greater of (i) £3,600 and (ii) the amount of your relevant UK earnings chargeable to tax for that tax year. So, in order for Sally to receive relief on gross contributions for current tax year of £163,000 she would need to have earnings in excess of this amount.