How much can I pay into my SIPP after retirement?

A SIPP is a self-invested personal pension, it gives you the freedom to choose how your retirement money is invested. Some people choose to continue paying into their SIPP after they've retired. If you're interested in doing that, here's what you need to know about how much you can contribute and the rules you'll have to follow. 

The information here applies not just to SIPPs but personal pensions in general. It doesn't apply to occupational pension schemes, where your former employer has a role in the scheme itself. You'll need to ask the scheme you want to pay into, if you're not sure if you can do so.

Even after you retire from your main job you may have some income - maybe you've taken on some part time work to keep busy or have a hobby job where you're selling things you make. You can continue to pay into your pension, but you'll need to bear in mind that contributions can only be 100% of your earnings or £3,600, whichever is higher - anything you pay into the pension above that doesn't qualify for tax relief. Pension or dividend income doesn't count towards your earnings. Some providers will only let you make pension contributions that qualify for tax relief. So, if you have no earnings, you'll be limited to £3,600 each tax year.

Pension annual allowance

For the tax-year 2024/2025 the pension annual allowance is £60,000. Even if your employment earnings are more than £60,000, this is the total amount you can pay into any pensions without extra tax charges. All pension contributions for your benefit are measured against the annual allowance in all its forms. This includes contributions paid by your employer if you have one, or by anyone else into your pensions.

Money purchase annual allowance (MPAA)

When you start taking money from your pension, which you can do from age 55 (or 57 from April 2028), you need to be aware of the money purchase annual allowance (MPAA). It covers if you've taken more than just your 25% tax-free lump sum - with flexible withdrawals, or lump sums. Some annuities will also trigger the MPAA. It applies to any pensions that you have and cuts the maximum you can pay in to £10,000 a year before tax charges apply. So, it's best to check if you'll activate the MPAA if you plan to keep paying into any pensions. 

Talking to a financial adviser is a good idea to fully understand how this affects your retirement savings and tax, especially if you plan to keep working or have other income. 

Any tax you'll pay will depend on your personal circumstances and any allowances could change in future. The value of investments in a pension can go down as well as up, and you may get back less than has been paid in. 

Contributing to a SIPP has several benefits, even after you retire.

• Tax relief. You continue to receive tax relief based on your personal circumstances. This relief is at your current tax rate, which could be lower in retirement. The government effectively tops up your contributions, helping to increase your retirement savings.
• Growth potential. Your contributions can grow tax-free. This growth means that even during retirement, your pension pot could increase, giving you more financial security as you age.
• Flexibility. You control where your contributions are invested, so you can change your strategy to match current market conditions and the amount of risk you want to take. 

Yes, there are a couple of important rules to consider.   

• Money purchase annual allowance (MPAA) and tax
  Any money added to your defined contribution pensions over the MPAA allowance of £10,000 may get tax relief but could lead to extra tax charges. It's important to check before paying money in, if you've triggered the MPAA.
• Recycling tax-free cash
  In the two years before and after you take tax-free cash from your pension there are limits on paying lump sums back in. If you want to add more than £7,500, you should speak to a financial adviser.

Yes, you can transfer other pension pots into your SIPP after you retire to bring together your retirement savings. This could reduce your management fees, make managing your retirement funds easier, and might give you better control over your investments, check with your pension provider, as some may not allow this. 

Always remember, the value of a pension can go down as well as up – and you could get less than the amount that's been put in.

It's important to check the terms of the pension you're transferring to make sure you consider valuable benefits or guarantees you might lose, plus the difference in any charges and investment choices. 

If you're not sure that a pension transfer is right for you, you should speak to a financial adviser. You can can find one at Unbiased - there will be charge for advice. For some pensions with valuable benefits like a guaranteed annuity rate, you'll have to take financial advice before you can transfer. 

If you're looking for more control over your retirement pot, you can transfer any eligible pensions to a new or existing Aviva SIPP. Then, you can pick from one or more of five investment options, to suit novice or experienced investors. And you'll be able to manage it all easily using our online service.