Ted

Hello, NEST recently advised me in an email that I can contribute more than my earned income as long as I don’t go over the annual allowance of £60,000. They also stated that they will claim tax relief on pension contributions worth more than 100% of my annual earnings. I gave them the following hypothetical scenario: Suppose my earned income is £30,000 and I would like to contribute an additional £20,000 of personal savings into my NEST pension pot, so a total of £50,000. The NEST advisor confirmed that I will need to contribute a net of £40,000 and that they would claim tax relief in the amount of £10,000. NEST stated the following in an email: “Tax relief applies to the contributions you make from your salary as well as any additional payments you make to top up your pot… That means the more you contribute, the more tax relief you benefit from.” Is this allowed? Can so contribute more than my earned income and are they allowed to claim tax relief on any pension contributions above my annual earnings?

Good morning, I am aware of the £60,000 annual allowance for this tax year and how tax relief at source works. Suppose my earned income for the 2024/25 tax year is £40,000 and I would like to contribute £60,000 towards my NEST pension pot. The additional £20,000 would be from personal savings. If I made a net contribution of £32,000 towards a SIPP, I would get £8,000 of tax relief. NEST have stated in writing that I would be allowed to contribute up to £60,000 to my pension pot, regardless of the level of my earned income. They have advised that they will also claim tax relief on the £20,000 gross contributions above my earned income. NEST stated: “Tax relief applies to the contributions you make from your salary as well as any additional payment you make to top up your pot… That means the more you contribute, the more tax relief you benefit…” Could you please clarify: 1. Am I allowed to make contributions to my NEST pension pot which are more than my earned income and up to £60,000? 2. If so, would NEST be claiming tax relief on the additional contributions above my earned income? Many thanks