Tax Relief Eligibility

To be eligible for tax relief, you must be under the age of 75 and:

• be a UK resident for tax purposes, or

• were a UK resident for tax purposes when you became a Profile Pensions customer and have been a UK resident for tax purposes at some point during the last five tax years, or

• have a spouse/civil partner with general earnings from overseas Crown employment which is subject to UK tax, or

• have ‘relevant UK earnings’ subject to income tax. Relevant UK earnings are normally earnings from UK-based work that is taxable but does not usually include investment income.

Contribution Allowances and Limits

Pensions are subject to an annual allowance limit of £60,000 or 100% of earnings, whichever is lower. The lifetime allowance framework remains in place from 6 April 2023, but the lifetime allowance charge has been removed. The maximum amount which you can take as a pension commencement lump sum (PCLS) will be £268,275 — 25% of the current standard lifetime allowance of £1,073,100. Your annual allowance may also be reduced if you earn over £200,000 a year. If you exceed these limits tax relief may be lost and/or penalties may apply, therefore, you should contact our advisers if you feel that your annual income, any of your contributions, or the overall value of your pensions may be close to or above these limits.

Claiming tax relief

For all personal contributions, if you are under the age of 75 basic rate tax relief is added to your pension automatically. If you are a higher rate taxpayer you may be able to claim further tax relief through your tax return. If you are a non-earner or earn less than £3,600 annually, you can contribute up to £2,880 net into your pension. Once the tax relief is added this will bring your total annual contribution to £3,600.

If you’re making a limited company contribution and you are a company director, your contribution could be classed as a business expense instead of salary and the contribution will not be eligible for tax relief. If you are unsure about whether to contribute from your company or your personal bank account you should check with your accountant before making the contribution.

Time taken to process the payment

The time taken to process your contribution depends on whether you set up a regular payment or a single contribution. 

The collection day for regular contributions is the second working day of the month. Instructions received before the 15th of the month will be taken the following month. The payment will then repeat on a monthly basis appearing on your statement as the name of your pension platform. Once the regular contribution has been set up you will receive confirmation in the post within 3 working days or no later than 10 working days before the first collection. 

Single contributions made via bank transfer will be added to your pension once they have cleared in your pension platform provider's bank account. If the payment is via a paper based form this can take up to 6 weeks to be processed.