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How to contribute a lump sum

Contributing into your pension pot

Updated over 3 weeks ago

Want to give your retirement savings a real boost? You can add a lump sum to your pension pot whenever you choose. This can be a smart way to accelerate your progress towards your retirement goals and even save on taxes.

Understanding Pension Tax Relief

The amount you contribute to your pension is entirely up to you. While there's no maximum limit, it's important to understand how tax relief works. You'll receive tax relief on contributions up to 100% of your salary, with an annual allowance of £60,000. Contributions above this threshold won't qualify for tax relief and may be taxed at your highest rate.

Maximising Your Savings

It's a good idea to review your contributions annually. If you find you haven't yet reached the annual allowance, consider making a lump sum payment to take full advantage of the available tax relief.

Carry Forward

Depending on your circumstances, you might be able to carry forward any unused allowances from the previous three tax years. This could significantly increase the amount you can contribute while still benefiting from tax relief, potentially allowing for contributions of up to £140,000 on top of your current year's allowance. (Eligibility criteria apply.)

How Tax Relief Works in Practice

Your pension contributions benefit from a 25% tax top-up from the government. Higher and additional rate taxpayers can claim further relief through their Self-Assessment tax returns. For example, if you're a basic rate taxpayer and contribute a £4,000 lump sum, the government will add £1,000 in tax relief, bringing your total contribution to £5,000.

Making a Lump Sum Contribution on the Jarvis app:

  1. Open the app and tap the menu icon (top left corner).

  2. Select 'Contributions'.

  3. Tap 'Make/Change Contributions' and follow the on-screen instructions.

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