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  • FIRST POST
    • typeractive
    • By typeractive 5th Sep 17, 9:21 PM
    • 821Posts
    • 350Thanks
    typeractive
    Quick question
    • #1
    • 5th Sep 17, 9:21 PM
    Quick question 5th Sep 17 at 9:21 PM
    Hi all,

    I've searched around for this and think i might be phrasing it incorrectly into google , if I get a job that earns more money, do I benefit from that when I reach retirement? I.e. will my state pension be higher? (the more you pay in the more you get back?).

    Thanks!
    "The future needs a big kiss"
Page 1
    • molerat
    • By molerat 5th Sep 17, 9:48 PM
    • 17,005 Posts
    • 11,183 Thanks
    molerat
    • #2
    • 5th Sep 17, 9:48 PM
    • #2
    • 5th Sep 17, 9:48 PM
    Not any more. The new 2016 pension gives you, at current rates, £4.56 pension for each year contributed up to a maximum 35 years and £159.55 per week irrespective of how much (over the minimum) you earn. There is of course transitional arrangements for pre 2016 pension earnings but if you had less than the maximum at April 2016 then the maximum new pension figure is all you can achieve.
    Last edited by molerat; 07-09-2017 at 9:58 AM.
    www.helpforheroes.org.uk/donations.html
    • enthusiasticsaver
    • By enthusiasticsaver 5th Sep 17, 10:04 PM
    • 4,242 Posts
    • 7,655 Thanks
    enthusiasticsaver
    • #3
    • 5th Sep 17, 10:04 PM
    • #3
    • 5th Sep 17, 10:04 PM
    Your state pension won't be but your occupational pension might. You need to check the scheme and benefits. I don't know about you but our retirement financing is based 75% on occupational pensions/savings and only 25% state pension and we retire(d) 8 years earlier than state pension age.
    Countdown to early retirement on 21.12.17 3 months to go.
    • Mnd
    • By Mnd 6th Sep 17, 7:15 AM
    • 121 Posts
    • 133 Thanks
    Mnd
    • #4
    • 6th Sep 17, 7:15 AM
    • #4
    • 6th Sep 17, 7:15 AM
    You could also open a SIPP or personal pension and pay additional money into that
    • xylophone
    • By xylophone 6th Sep 17, 10:52 AM
    • 22,869 Posts
    • 13,228 Thanks
    xylophone
    • #5
    • 6th Sep 17, 10:52 AM
    • #5
    • 6th Sep 17, 10:52 AM
    http://forums.moneysavingexpert.com/showthread.php?p=71233118#post71233118

    Your workplace pension is currently LGPS and you were formerly in TPS?

    https://www.yourpensionservice.org.uk/news/?id=2015/08/21/79649&news=882&page=pr&_

    Have you obtained a new state pension statement?

    https://www.gov.uk/check-state-pension
    • typeractive
    • By typeractive 6th Sep 17, 2:15 PM
    • 821 Posts
    • 350 Thanks
    typeractive
    • #6
    • 6th Sep 17, 2:15 PM
    • #6
    • 6th Sep 17, 2:15 PM
    Thanks all!

    Yes I was in the TPS, and now LGPS. I know my employer pension is better as the both the salary % contribution is higher, though it was the State Pension I was most interested in. I'd thought "higher earners pay more in, so get more out".

    Some salaries literally end up with you paying out a lot more in tax and NI, but very little benefit to yourself (Yes I'm sure this is well known, but I've never really considered it!). I'm officially growing up and becoming grumpy!
    "The future needs a big kiss"
    • AlanP
    • By AlanP 6th Sep 17, 9:19 PM
    • 892 Posts
    • 612 Thanks
    AlanP
    • #7
    • 6th Sep 17, 9:19 PM
    • #7
    • 6th Sep 17, 9:19 PM
    Thanks all!

    Yes I was in the TPS, and now LGPS. I know my employer pension is better as the both the salary % contribution is higher, though it was the State Pension I was most interested in. I'd thought "higher earners pay more in, so get more out".

    Some salaries literally end up with you paying out a lot more in tax and NI, but very little benefit to yourself (Yes I'm sure this is well known, but I've never really considered it!). I'm officially growing up and becoming grumpy!
    Originally posted by typeractive
    Taxes and NI are not meant to benefit the individual payer directly though so yes higher earners pay more than those that earn less.

    Personally I would prefer to be paying 40% tax as a higher earner than paying virtually no tax on a minimum wage job on balance
    • Silvertabby
    • By Silvertabby 6th Sep 17, 9:28 PM
    • 1,512 Posts
    • 1,807 Thanks
    Silvertabby
    • #8
    • 6th Sep 17, 9:28 PM
    • #8
    • 6th Sep 17, 9:28 PM
    Personally I would prefer to be paying 40% tax as a higher earner than paying virtually no tax on a minimum wage job Posted by AlanP
    Exactly. I'm now retired, although I don't get my State pension for another 4 years, and pay tax (20%) on some of my occupational pension income. Would I rather be in my position - or would I prefer to pay no tax because my income is too low. What do you think.
    Last edited by Silvertabby; 06-09-2017 at 9:33 PM.
    • marlot
    • By marlot 7th Sep 17, 6:19 AM
    • 3,040 Posts
    • 2,173 Thanks
    marlot
    • #9
    • 7th Sep 17, 6:19 AM
    • #9
    • 7th Sep 17, 6:19 AM
    T...Some salaries literally end up with you paying out a lot more in tax and NI, but very little benefit to yourself (Yes I'm sure this is well known, but I've never really considered it!). I'm officially growing up and becoming grumpy!
    Originally posted by typeractive
    As 50% of the population don't pay tax any more (with the higher thresholds and various credits), the country needs people like us to pay for everything!
    Last edited by marlot; 07-09-2017 at 6:21 AM.
    • Dorian1958
    • By Dorian1958 7th Sep 17, 6:28 AM
    • 70 Posts
    • 35 Thanks
    Dorian1958
    I wish I was paying higher rate tax too, then I would be shovelling a lot more into AVC's. Reminds me of a former boss who at his retirement do spent the entire time grumbling about the 40% tax take off his lump sum (somehow wangled redundancy which exceeded £30k), while the half dozen basic rate taxpayers present were paying for his dinner. Never did get a thanks afterwards either.
    • FatherAbraham
    • By FatherAbraham 7th Sep 17, 7:20 AM
    • 737 Posts
    • 561 Thanks
    FatherAbraham
    Taxes and NI are not meant to benefit the individual payer directly though so yes higher earners pay more than those that earn less.
    Originally posted by AlanP
    Your assertion about National Insurance is not really true. It remains in principle a contribution-based compulsory insurance scheme for workers.

    Warmest regards,
    FA
    • Malthusian
    • By Malthusian 7th Sep 17, 9:36 AM
    • 2,882 Posts
    • 4,114 Thanks
    Malthusian
    Your assertion about National Insurance is not really true. It remains in principle a contribution-based compulsory insurance scheme for workers.
    Originally posted by FatherAbraham
    In principle income tax is a temporary measure to pay for the Napoleonic Wars.

    His assertion about National Insurance is absolutely true. This is one of those cases where "in principle" or "in theory" means the opposite of "in reality".
    Last edited by Malthusian; 07-09-2017 at 9:39 AM.
    • steampowered
    • By steampowered 7th Sep 17, 11:07 AM
    • 1,683 Posts
    • 1,611 Thanks
    steampowered
    Some salaries literally end up with you paying out a lot more in tax and NI, but very little benefit to yourself
    Originally posted by typeractive
    If you are worried about paying too much tax, an excellent way around this would be to contribute into a private pension.

    That will get you more in retirement and will get you tax relief.
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