Making in-specie contributions into pensions

If a client is looking to make increased contributions into their pension to beat the reduction in annual allowance but they don’t have the cash, an in-specie contribution is an option. Claire Trott, head of Pensions Technical, Talbot and Muir looks at the pros and cons of making contributions in this way The reduction in the annual allowance for high earners next year has led to an increased interest in higher contributions this year to use up carry forward before it is lost.

However, many do not actually have the cash to pay the contributions but this isn’t a problem if they have other assets, they can pay an in-specie contribution. Paying an in-specie contribution may sound simple but there are a number of issues to consider and hoops to jump through to achieve what the client wants to achieve. Technically there really isn’t such a thing as an in-specie contribution; all contributions must be expressed as a monetary amount so it is necessary to start the process with a figure in mind and make it clear to the provider the contribution is to be of that amount.

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