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Can I still contribute to a pension after retirement?

We look at the reasons why you should consider paying into your pension even if you’ve already taken money out.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

If you’ve already taken some money from your pension you might be blissfully unaware that you can pay more money in and still get a helping hand from the Government.

Well the good news is, if you’re a UK resident under 75 – you can. And there are a number of other benefits you could get by doing so.

This article isn’t personal advice. If you’re unsure, please seek advice. Pension and tax rules can change and the value of any benefits will depend on your circumstances. Remember, unlike cash, all investments and their income fall as well as rise in value, so you could get back less than you invest.

What are the main benefits?

  • It can be tax efficient – any money in a pension can grow free from UK income and capital gains tax. You could also get tax relief from the government on money you pay in provided you’re a UK resident under the age of 75. No matter how much tax you pay, they add 20% in basic rate tax relief, but certain limits apply. Download our tax relief guide to find out more.
  • Your loved ones can receive anything left in your pension, normally free from inheritance tax – if you die after the age of 75, any money your pension beneficiaries’ withdraw will be taxed at their marginal tax rate. If you pass away under the age of 75, these withdrawals will normally be completely tax free. Download our ‘what happens to your pension when you die’ factsheet to find out more.
  • You can access the money whenever you need to as long as you’re 55 or over (rising to 57 from 2028) – with any new money you add to a pension you’re still normally entitled to take up to 25% tax-free (the rest is taxed as income), subject to lifetime allowance limits. Download our guide to find out more on how to take money from a pension.

How much can I pay into my pension?

How much you can pay in depends on your personal circumstances.

Non-earners and those earning less than £3,600

If you’re earning less than £3,600, or you’re a non-earner, you can pay in up to £2,880 a year – the government will then automatically add £720 in basic rate tax relief to bring the total to £3,600.

It might not sound like a lot but if you retire at 65 and save the full amount each year up to your 75th birthday you could end up with an extra £7,200 in tax relief alone. That’s essentially free money from the government, which you can access yourself or even pass on to your loved ones.

Still working and flexibly accessed a pension

If you’ve flexibly accessed a Money Purchase pension (like the HL SIPP) you would have triggered the Money Purchase Annual Allowance (MPAA). This means you and your employer are restricted to paying in up to £4,000 a year in total to money purchase pensions. Flexibly accessing your pension includes taking a lump sum payment (UFPLS), or taking a taxable income from most Flexible Drawdown arrangements (this excludes only taking your 25% tax-free cash entitlement). Remember though, to benefit from tax relief you can only pay in as much as you earn.

If you exceed the MPAA, any excess will be added to your income and taxed at your highest rate. This charge should be declared and paid through your income tax self-assessment.

Still working and haven’t flexibly accessed a pension

If you haven’t accessed your pension at all, only taken your tax-free cash, or bought an annuity you won’t have triggered the MPAA. This means you can still pay in as much as you earn and receive tax relief from the government, subject to the annual allowance which is £40,000 for most people.

Let’s say you earn £30,000 a year, you would only need to pay in £24,000 and the government would add £6,000 in basic rate tax relief.

Those who pay tax at higher rates could claim back further tax relief through their tax return.

To find out how little a pension payment could really cost you try our pension tax relief calculator.


You might also want to take a look at the government’s Pension Wise service, which offers a free impartial service to help you understand your options.

Watch out for the Tax-Free Cash recycling rule

When paying money into a pension after you’ve taken your tax free cash, you need to be mindful of the tax-free cash recycling rule. It aims to stop people exploiting pension tax relief rules. Tax-free cash recycling can apply when a person significantly increases their pension contributions before or after they’ve taken their tax-free cash entitlement.

Find out more about the tax-free cash recycling rule

How to pay money into a pension if you're retired

It’s easy to make a payment or open a new pension.

If you already have an HL SIPP, the quickest way to make a payment is online – you just need to log into your account.

Find out more on how to top up my SIPP

If all of your HL SIPP is in drawdown, you’ll need to contact us by phone or Secure Message to re-active your old SIPP. Then you can make a payment over the phone or online. If you don’t have a personal pension, but you’d like to set one up, you could consider starting an HL SIPP.

You can choose your own investments, track how it’s doing online at any time, and make changes whenever you like. You’ll also have access to all the pension freedoms, when it comes to receiving an income.


What did you think of this article?

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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