Pensions for others
Did you realise that you can pay into pensions for other people, up to £3,600 gross (2009/10) each tax year? This includes making pension contributions for the benefit of:
- a child – e.g. your child, grandchild, godchild or other young relative
- a young adult – at university, on a gap year, taking an apprenticeship, etc
- a spouse or civil partner
.. or, in fact, anyone else you choose!
And it doesn’t matter whether or not you (or even they) are earning a salary, or paying tax, for this to be allowable – they just need to be under the age of 75.
The maximum you can put in is generally £2,880 net per tax year (which the Government grosses up to £3,600) – however, if the other person is earning a wage or salary, then you can pay in up to 100% of their employment earnings for them, if this figure is greater than £3,600. This may be an attractive option for high earners with total income of £150,000 or more who have a high-earning spouse with income under £150,000 – i.e. it could make sense to make a large contribution into their spouse’s pension in order to benefit from the tax relief.
 Retirement planning |
