Answered by Andrew Jenkinson
Yes, you can. Any UK resident (under the age of 75) can make pension contributions and receive tax relief on their payments, even if they are a non-taxpayer.
This can be useful if you want to build up a pension in your own right, for example if your partner is the main breadwinner and you stay at home to look after your children.
Pension for non-earner
As a non-earner, you can still receive 20% tax relief even if you don’t pay tax. In this case, the most you can pay into your pension is £3,600, made up of your contributions of £2,880 and the taxman’s contribution of £720.
You can take your pension benefits from the age of 55, with the first 25% available as a tax-free lump sum. The remaining 75% is available as taxable income. If you are a non-taxpayer (and these pension payments do not push you into tax), this payment would not be taxed.
Personal Allowance and Tax Relief
For example, imagine you invest £3,600, which grows to £10,000. When you decide to take your pension benefits, you can take 25%, or £2,500, as a tax-free lump sum. If you want to take the remaining 75% as a single income payment of £7,500, then this amount is not taxed if your total income is less than the personal allowance of £11,500 (for the 2017/18 tax year). Your personal allowance is the amount of income you can receive each year without having to pay tax on it.
For more on the tax relief you can receive on pension contributions, use our Pension Contributions Tax Relief Calculator here →
Frequently Asked Pensions Advice Questions
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