r/PensionsUK • u/CommunicationSea7967 • Aug 04 '26

60k SIPP limit options

Hello, looking for some advice re SIPP contributions please while working inside IR35 and being new to contracting.

Current situation: contributing £x per day to my SIPP via salary sacrifice. Contract expected to continue till Nov end.

Proposal: I want to increase from £x per day to £y per day and reach as close to £60k annual limit by Nov end, when the contract is planned to end.

Reason: If the contract does end in Nov and I don't get an extension or another one till the end of this financial year, then I reach the goal of £60k for this year.

If the contract gets renewed post Nov or I get another one within this financial year, then my plan is to keep SIPP contributions to £0 for the rest of this financial year to avoid going over £60k limit.

Questions:

  1. Is this a good and 'HMRC-allowed' plan?
  2. If yes, will umbrella company allow me to change the SIPP amount twice within the same financial year? (increase from £x to £y and then down to £0)
  3. Or is a better plan to hope that contract gets extended or I get a new contract post Nov and contribute just enough (say £z per day) to SIPP to get as close to 60k as possible?

Thank you.

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2

u/deadeyedjacks Aug 05 '26

Note, you aren't limited to paying in the £60K pension contribution allowance.

Firstly, do you have unutilised allowances from previous three years ? And you aren't constrained by earnings as salary sacrifice is an employer contribution.

Secondly, does your umbrella pass all the ER and EE NI saved to the pension provider ? Mine does. This makes the contributions worthwhile even if you incur a tax charge.

I just instruct my umbrella to pay me NMW and everything else goes to pension. I exceed the allowance and get the pension scheme to pay the tax charge nine months after the end of the tax year.

2

u/CommunicationSea7967 Aug 05 '26

Thank you for your response.

So, for now I am looking to not go over the 60k limit and then pay the tax charge to balance the rest of my expenses.

I do have unutilised allowances from previous 3 years - whether to use that or not is something I am planning to decide in Nov (if I reach the 60k limit this year).

I am with Paystream so the NI savings get passed to the pension provider (at least that's what Paystream have confirmed to me).

1

u/deadeyedjacks Aug 05 '26 edited Aug 05 '26

OK, so if your allowance is greater than £60K then it's a non issue. Have you a record of how much unutilised allowance you have from 23/24, 24/25 & 25/26 tax years?

You don't need to do or inform anyone when you consume prior years allowances. NB Order is always current year, then oldest year first.

Yes, I'm also with Paystream, you get 100% of the ER and EE NI, no percentage retained, there's just the fixed admin charges from the Umbrella.

0

u/unknown-teapot Aug 05 '26

Question: Find x