pension plan payments & tax credits ??

aliyah

Hi,

Have I heard right that if my husband takes out a personal pension (his employers do not have a scheme), the payments he makes into this on a monthly basis can be 'claimed back' through Tax Credits?

Not sure if I'm explaining this properly but basically the say, £80 per month going to the pension would be 'taken off' his income in their assessments....

How does this work? Or have I totally got the wrong end of the stick??

Thanks as always

Aliyah

Bagpuss1973

I think you are correct.

Basically if he earns £100 a week then pays £20 a week to a pension the tax credit bods see it as he is earning £80 a week, I think they do it to encourage us all to have a pension scheme.

Used little figures to keep it simple for my little brain!:D

aliyah

Ah so Im not going mad! Thought I heard this somewhere!

Thanks Bagpuss. Sounds a good deal to me. Better get searching for a pension now!

Appreciate you replying so quickly

Aliyah x

isasmurf

Tax Credits are based on taxable income. Contributions to pension schemes are not taxable income, so they are excluded from your income when assessing how much you shoudl get.