Hi folks and welcome back to another five minute Friday here on Meaningful Money.

Thank you to Ian for asking this question on email this week.

Ian, thank you so much and I hope that this

answer satisfies you. Ian asks if he can pay into a pension for his wife and

specifically can he pay unused annual allowances from two or three years ago for his wife who doesn't earn a salary?

So I thought I'd answer this in today's five minute Friday, so let's put five minutes on the clock down here and let's crack on.

So how much can you pay into a pension? You can pay up to

100% of your net relevant earnings into a pension or 40,000 pounds per year, whichever is lower.

So if you're earning in excess of 40,000 pounds,

then you can put in 40 grand.

If you are earning less than 40,000,

then you can put in 100% of your salary. Now I use the phrase

that net relevant earnings. Gotta love a finance industry technical jargon term.

Net relevant earnings for the purposes of this simply it means earned income.

So not interested on investments, not dividends paid by shares that you own, not rent

from any property, not pension income, but earned income in the true sense of that word so

salary from work profits if yourself employed all that sort of stuff earned income

now if you don't have any net relevant earnings you can

pay up to 3,600 pounds per year gross into a pension. That's 2,880 pounds net of basic rate

tax relief. So you write a check for 2,880 net of basic rate tax relief.

So you ride a check for 2,880 and the revenue make it up to the 3,600.

That's basic rate, tax relief.

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