You probably know that your employer can pay into your pension. But you might not know that someone else can pay into a pension for you. It could be your husband, wife, civil partner, partner, or just a (generous!) friend or family member. Find out how it works.
Can my husband pay into my pension?
If you want to increase your pension, but you’re not working or you’re not earning enough to pay more into your pension, there may be ways round this. If you’re married your husband or wife could pay into your pension. But you don’t have to be married or in a civil partnership for one person to pay into the other’s pension. Anyone can set up a pension and pay into it for someone else.
How much can be paid into a pension for someone else?
If you are paying into a pension for someone else, then the amount that you can pay into their pension will depend on their own circumstances, not on yours.
The current annual limit for the amount someone can pay into their pension(s) every year is £40,000 or 100% of their earnings, whichever is lower. If they are not working, they can pay in up to £2,880 a year and still get tax relief at the basic rate. This limit is the amount that can be paid into all the pensions they have, not each pension.
SAVVY TIP: Tax relief means that some of the tax you would normally pay to government is paid into your pension instead. If you’re a basic rate taxpayer, means that a £100 contribution into your pension would cost you £80.
Tax relief and paying into someone else’s pension
If you pay into someone else’s pension, you get tax relief at the rate of the person who owns the pension, not yours. That means that if, for example, you are a higher rate taxpayer and your husband is a basic rate taxpayer, you could pay into his pension but you would only get tax relief at the basic rate.
Why pay into someone else’s pension?
There are several groups of women who could boost their pension if someone else pays into it for them. Women who aren’t working because they’re bringing up children, or women who are caring for family members or who are earning less and who can’t afford to pay more into a pension could be helped.
If the woman is the main breadwinner, she could pay into her husband or partner’s pension. Parents and grandparents can also set up a pension for their child or grandchild.
Setting up a pension for your child or grandchild
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