You probably know that your employer can pay into your pension if you belong to a workplace pension scheme.
But if you don’t have access to a company pension, or aren’t currently earning, you might not know that someone else can pay into a personal pension on your behalf.
It could be your husband, wife, civil partner, partner, or just a (generous!) friend or family member. Here, we explain how it works.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’re looking for somewhere to start, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,000 reviews on VouchedFor, the review site for financial advisors.
Can my husband or wife pay into my pension?
If you want to increase your retirement savings, but you’re not working or you’re not earning enough to pay more into a pension, there may be ways around this.
If you’re married, your husband or wife could pay into a personal pension on your behalf. But you don’t have to be married or in a civil partnership to pay into a pension for someone else. You can, for example, open a SIPP for a dependent, including someone under 18 (this is known as a Junior SIPP). You can also make payments into someone else’s SIPP, but they must set up the SIPP account themselves first.
You can learn more about how SIPPs work in our article Everything you need to know about SIPPs and about Junior SIPPs in our guide Should I start a pension for my child or grandchild?
How much can someone else pay into my pension?
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 £60,000 or 100% of their earnings, whichever is lower (you can find out more about pension allowances in our guide How do pension allowances work?). If they are not working, they can pay up to £2,880 a year into a pension and still get tax relief at the basic rate.
Tax relief means that some of the tax you would normally pay to the government is paid into your pension instead. If you’re a basic rate taxpayer, this means that a £100 contribution into your pension would only cost you £80. Read more about how tax relief works in our article How pension tax relief works.
Tax relief and paying into someone else’s pension
If you pay into someone else’s pension, tax relief is paid at the rate of the person who owns the pension. That means that if, for example, you are a higher rate taxpayer and your husband is a basic rate taxpayer, and you paid into his pension, you would only get tax relief at the basic rate.
The pension provider reclaims this tax relief and adds it to your husband’s pension pot. You can’t claim any tax relief yourself on the money you’ve paid in, as it’s treated as if it had been paid by your husband. If your husband is a higher rate taxpayer, however, he can claim any higher rate tax relief through his self-assessment tax return, even though he hasn’t made the contribution.
Why pay into someone else’s pension?
There are several groups who could boost their pension if someone else pays into it for them. Those who aren’t working because they’re bringing up children or grandchildren, or those who are caring for family members, or anyone who is 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. As mentioned previously, parents and grandparents can also set up a pension for their child or grandchild. Find out more about this in our article Financial gifts for young children: what are the options?
Bear in mind that if you are paying into a pension on behalf of someone else, under current rules, they can’t access these funds until they reach the age of 55. The government has confirmed that this will increase to 57 from 2028.
If you’re not sure whether your husband or partner should pay into your pension, or you should contribute to their retirement savings, you should seek professional financial advice. You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guide How to get advice on your pension.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’re looking for somewhere to start, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,000 reviews on VouchedFor, the review site for financial advisors.
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