Almost three quarters (73%) of people don’t know it is possible to contribute to someone else’s pension, Hargreaves Lansdown has found.

A survey of 2,000 people, which was carried out by Opinium, found that two thirds of men were unaware of these rules, with 80% of women also stating they did not know.

The research also found that higher rate taxpayers were more aware of the rules, with 61% stating that they knew of the rules, compared to just 21% of basic rate taxpayers.

Under the current rules, you can contribute up to £2,800 per year to a pension for a non-earning spouse, partner or child and they will receive rax relief topping it up to £3,600.

Even if your spouse/partner is working, you can still contribute as long as all other contributions remain below their annual allowance, which is whatever is lowest of 100% of their earnings of £60,000.

Head of retirement analysis at Hargreaves Lansdown, Helen Morrissey, said: “Contributing to a partner’s pension during times when they aren’t working can play a vital part in plugging any gaps in their long-term saving and helping them build a resilient retirement income. Meanwhile, you can get your child’s or grandchild’s pension planning off to a flying start by paying into a Junior SIPP on their behalf while they are small.

“It’s an incredibly tax efficient way of using your money, particularly if you have used your own annual allowance. You don’t even have to pay in the full amount every year, making smaller contributions as and when you can will have a big impact long-term.

“If you have more money to spare and you have used your own annual allowance, then you can top up the pension of a working spouse or partner too as long as their overall contributions don’t exceed their annual allowance.

“Pensions are not the only way to help a loved one plan for retirement. As long as they are aged between 18 and 39 you can also contribute to a lifetime ISA that they have opened which can be used either for retirement or to help them save for their first home. Contributions of up to £4,000 per year attract a 25% bonus which can really help your loved one get their financial planning off on a firm footing and make your own money work as hard as possible.”

Share Story: