Contributing to your pension
Click here to find out about the changes to SIPP regulations.
There are now numerous methods of contributing towards a pension fund to suit your financial circumstances. If you are in any doubt over the most effective contribution methods for you, you should contact a tax specialist
| Contributor | Frequency | Comments |
|---|---|---|
Planholder |
Regular savings | Usually paid monthly by: Annual payments are also possible
All payments are paid 'net' of Basic rate tax relief.
When the plan is established a 30-day cooling-off period applies. Once established, regular premiums are non refundable |
| Single premiums | Ad hoc payments can be made at any time. All payments are paid 'net' of Basic rate tax relief. When the plan is established a 30-day cooling-off period applies. Subsequent single premiums paid as increments to existing plans may or may not attract similar periods in accordance with their rules. |
|
| Consolidation payments | Payments from former pension providers,
normally termed switches or transfers.
Each payment is deemed a new arrangement and attracts a cooling-off period of 30 days. |
|
Employer |
Regular savings | Usually paid monthly by Annual payments are also possible
All payments are paid gross (the employer may claim Corporation Tax Relief on the payments)
The employer is not the planholder and has no cooling-off rights. However, when the plan is established a 30-day cooling-off period applies. Once established, regular premiums are non refundable. |
| Single premiums | Ad hoc payments can be made at any time
but are often linked to bonuses.
All payments are paid gross (the employer may claim Corporation Tax Relief on the payments).
The employer is not the planholder and has no cooling-off rights. However, when the plan is established a 30-day cooling-off period applies. Subsequent single premiums paid as increments to existing plans may or may not attract similar periods in accordance with their rules. |
|
Third parties |
Regular savings | Usually paid monthly by Annual payments are also possible.
All payments are paid ‘net’ of Basic rate tax relief.
The third party is not the planholder and has no cooling-off rights. However, when the plan is established a 30-day cooling-off period applies. Once established, regular premiums are non refundable. |
Single premiums |
Ad hoc payments can be made at any time
but are often linked to bonuses.
All payments are paid ‘net’ of Basic rate tax relief.
The third party is not the planholder and has no cooling-off rights. However, when the plan is established a 30-day cooling-off period applies. Subsequent single premiums paid as increments to existing plans may or may not attract similar periods in accordance with their rules. |
Cooling-off periods, know as ‘the right to change your mind’, are applied differently by different providers. With some, once contributions are invested, the cooling-off period automatically ceases.
With others, the period lasts for the whole 30-day period but if investments fall and the investment has lost money, the loss will be suffered by the contributor. However, if the investment gains in value, the gain is forfeit.
 Retirement planning |
