Can I pay into a SIPP and company pension at the same time?

How to work out what you can actually put in

1. Add up every contribution, not just yours. The annual allowance counts everything paid into every pension in the tax year, including what an employer or your own company pays. A director planning around their personal contributions alone will usually understate the total.
2. Check the earnings limit separately. HMRC's guidance on GOV.UK sets out that tax relief on your own contributions is limited to 100 percent of your earnings in the year. This is a different constraint from the annual allowance and for a director on a small salary it is often the one that binds first.
3. Look back three years. Unused annual allowance from the previous three tax years can often be carried forward, which is what makes a large one-off employer contribution possible in a profitable year. It depends on having been a scheme member in those years.
4. Check whether you have already flexed. Once you have flexibly accessed a pension, a lower money purchase annual allowance applies instead, and it is far smaller. Taking an income first and contributing later is the order in which this catches people out.

Nothing limits the number of pensions

There is no cap on how many pension schemes you may belong to or contribute to. A SIPP alongside a workplace pension is common, and for a company director a SIPP receiving employer contributions alongside an auto enrolment scheme is an ordinary arrangement rather than an aggressive one.

What the rules control is the total that attracts tax relief, and that total is measured across every scheme together. Holding three pensions gives you three sets of charges and one shared allowance, which is the argument for consolidating rather than for spreading.

The two limits that actually bind

The first is the annual allowance. GOV.UK states that the annual allowance is the most you can save in your pension pots in a tax year before you have to pay tax, and that this is 60,000 pounds. It counts contributions from you, from your employer and from anyone else, across every private pension you hold.

The second is the earnings limit on relief. HMRC's guidance on GOV.UK sets out that tax relief on what you pay in is limited to 100 percent of your earnings in a year. For a director taking a small salary and larger dividends, personal contributions are capped tightly by this, while employer contributions from the company are not measured against it in the same way.

Why a company contribution is treated differently

A contribution the company makes is an employer contribution. It is not limited by the director's own earnings in the way a personal contribution is, and it is made from company money rather than from income already taxed on the individual. It still counts towards the same annual allowance.

Whether such a contribution is deductible for the company is a separate question decided on its own terms, and it is not one this page answers for a particular company. This site does not advise on a company's own facts, which is the rule its charter already applies to every other relief it writes about.

Common questions

Is there a limit on how many pensions I can have?

No. You may belong to and contribute to as many pension schemes as you like. The limit is on the total contributions that receive tax relief in a tax year, measured across all of them together, not on the number of schemes.

Does my employer's contribution use up my allowance?

Yes. GOV.UK is explicit that the annual allowance applies to the total amount paid into a defined contribution scheme in a tax year by you or anyone else, including your employer. A director planning around personal contributions alone will usually understate the total.

How much can go in altogether?

The annual allowance is 60,000 pounds a year, and separately, HMRC's guidance on GOV.UK sets out that your own contributions attract relief only up to 100 percent of your earnings. Unused allowance from the previous three tax years can often be carried forward. A lower money purchase annual allowance applies once you have flexibly accessed a pension.

Should my company pay into my SIPP instead of paying salary?

That is a decision about one company's own facts and this site does not advise on those, for the same reason its charter refuses advice on whether a particular project qualifies for a relief. An enquiry here reaches a firm authorised to look at the specifics.

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