Contributions Without Earnings - Money purchase contributions appear to be limited to £3,120 or £3,600 annually

Q - I have scheduled employee contributions of £4,000 pa; however, these contributions appear to be limited to £3,120 pa or to a total of £3,600 with “unscheduled” contributions included. 

A - Check your client's employment income, as entered on the Employment screen. 

Pension contributions from the individual cannot exceed £3,600 pa without supporting earnings. What you are seeing is this limit enforced and the allowed amount netted down by 20% tax relief, which is shown separately in the chart details as the unscheduled portion of the contribution.


Also note that dividends related to company ownership do not count toward this earnings requirement. If an individual were paid £50,000 annually in dividends but still doesn't have earned income, the £3,600 annual contribution limit would still apply. 



Retirement Income (Webinar 2)