I hope this is an interesting question for you because I've so far been unable to find a definitive answer.
Following early retirement on medical grounds I was awarded a full pension but arranged it so that I pay only tax of c£60 per annum on an annual pension of c£12,000 with the balance being commuted to a lump sum payment and invested (not in my SIPP). In addition I get c£5,500 p.a. in PIP benefit which is not taxable.
I was aware that I couldn't invest the lump sum in my uncrsytallized SIPP but how much can I continue to contribute to my pension from other sources e.g. untaxed savings and investments? Am I considered a non-taxpayer and therefore only entitled to contribute £2880 (net) per annum or, because I do pay some tax however little, can I contribute 100% of my earnings to my pension fund? If the latter, am I entitled to include PIP in calculating my earnings or only my defined pension scheme?
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