What Is The Pension Annual Allowance?
Question asked by Mr S Pavani
Do you get National Insurance relief on pension contributions just as you get tax relief?
Yes, you do have to pay National Insurance contributions on money going into your pension.
You rightly state that you don’t pay income tax on pension contributions, but National Insurance is still due on cash you put into your pension.
If you’re employed, your employer will deduct National Insurance contributions from your wages before you get paid, so before any tax or pension contributions have been deducted. Your payslip will show the National Insurance contributions you’ve made over the year.
If you’re self-employed you pay Class 2 contributions of £3 a week for 2019/20 on all earnings above £6,365, plus Class 4 contributions of 9% on taxable profits between of between £8,632 and £50,0000 in the 2019/20 tax year. On profits over £50,000, Class 4 contributions are 2% of profits. Again, these contributions are made from your profits before tax is deducted and any pension contributions have been made.