I've seen an article in the daily mail

[arnold cheshire]

It says if you are receiving pension at 55 you can only carry on paying in £4000 a year else you will be hit with a tax bill

[heapsy]

It says if you are receiving pension at 55 you can only carry on paying in £4000 a year else you will be hit with a tax bill

I've read this somewhere else. My question is WHY would anybody want to draw their pension, then pay into another pension? I believe you can pay in to one that you are already drawing, in certain circumstances. I can understand if someone was made redundant, and then took a lower paying job, they may need the money to make ends meet. To pay into the pension with the new job would make sense. However, if you don't NEED the pension, why would you take it at a reduced rate, leaving you on a lower income when you do eventually retire, but then build up another pension? The only exception would be in a situation like ours, where a company has closed a scheme, but then started another with a later NRA, as RM did in 2008. Maybe I'm missing something, but it does seem strange.

[arnold cheshire]

I suppose if it's just you paying in for the 4k you're ok but if it includes company contrabutions you're not

[RobertT]

Are you referring to this article? If so, it only relates to DC pensions, although it could affect RMPP members with AVC's, which is covered here. And the £4k limit does include employer contributions too!

The advantage of paying into a DC pension while already drawing on it(or different one) above the 25% tax free amount, is that you still get the tax relief and employer contributions(if applicable), which we all know are valuable benefits.

I would agree with heapsy, that taking a DB pension early and so incurring an actuarial reduction, doesn't make sense.

[lordthornber]

Apologies if this muddies the water but this is both perfectly legal and simple to achieve.

See the third article "If you do not pay income tax"

https://www.gov.uk/tax-on-your-private- ... tax-relief" onclick="window.open(this.href);return false;

[RobertT]

Good point!

Individual DC pensions are really just glorified savings accounts, so why wouldn't you want to get a bit of 'free money' to help your balance grow, whether you're already drawing a pension or not?

There are people out there who pay into their pension beyond the age of 55 just to take advantage of the tax relief and then withdraw the full amount shortly afterwards, and so benefit from a nice 25% uplift on their money for doing nothing.
Although you may have to be careful about the tax implications, depending on what other income you have.