Work Pension

sorcerer

Hi Everyone,

In my SIPP if I put more money in then the government put in money afterwards. So for example, if I have put in £80 then the goverment put in £20. Does the same thing happen with a work pension?

atush

All work pensions aren't the same. It will depend on what type you have. The work pensions where the employer pays a contribution (free money) and they pay your contribs into the pension before NI (means you save on tax) are both good pensions to join. You need to make enquiries to your employer and ask how they run thir pension scheme.

sorcerer

atush wrote: »

All work pensions aren't the same. It will depend on what type you have. The work pensions where the employer pays a contribution (free money) and they pay your contribs into the pension before NI (means you save on tax) are both good pensions to join. You need to make enquiries to your employer and ask how they run thir pension scheme.

Yes I think that is how they do it, I put 5% in and they put 5% in.

molerat

With a works pension you only pay £64 to get £80 in the fund, the pension payment is taken off your pre tax earnings.

sorcerer

molerat wrote: »

With a works pension you only pay £64 to get £80 in the fund, the pension payment is taken off your pre tax earnings.

Ahh ok thanks, so because it's taken from source before tax is taken off, this is bascially my 20% tax relief.

atush

The fact that the money in your pension is gross not net, and avboids NI is one reason work pensions are better than Sipps.

Is 5% the max youre employer will contribute? If not, contribute more to get the Max. And even if not, you can put more than 5% in.