Private Pension

richardgw

Hi Guys,

I'm a newbie with very little knowledge on all things financial so please go easy!

I am now 2 years out of Uni (with the compulsory huge student) & have started a private pension to accompany my NHS pension.

My only question is that on my payslip I have my NHS pension contributions which are exempt from tax but my private pension is taken from my bank account as a standing order by which point I'm imagining that it is taxed.

Is there some mechanism that means that cash I've lost through income tax is automatically added back on to my private pension? Or have I missed the point?

Thanks for all your help in advance.

Richard

dunstonh

My only question is that on my payslip I have my NHS pension contributions which are exempt from tax but my private pension is taken from my bank account as a standing order by which point I'm imagining that it is taxed.

The term "private" pension doesnt actually indicate a product type. It can effectively be anything you are arranging yourself towards your retirement. On the assumption it is a stakeholder pension or personal pension and that you are paying by direct debit, then with these you would pay the net of basic rate tax contribution. i.e. if your contribution was £100pm into the pension then your direct debit would be £80. If you are a higher/additional rate taxpayer then the extra tax relief would need to be claimed via your tax return.

gadgetmind

As Dunstonh says, it all works automagically for basic rate tax payers, but do remember to look at this again if you start getting close to higher rate.

Loughton_Monkey

Just get a detailed pesnion statement from your 'private' pension. What you should see is that every contribution you have made (say at £160) would 'magically' show up as £200. This is how it is generally done these days. Only at 40% tax do you usually have to make some other form of claim.

gadgetmind

Loughton_Monkey wrote: »

Only at 40% tax do you usually have to make some other form of claim.

Um, 40% and 50%, surely?

atush

Now now. Calm down Dears.


Don't confuse the newbie with those last few posts lol

richardgw

Thanks guys, I realise that saying private was a rather naive thing to say!

I've delved into my documents and it is indeed the magical case of the contributions I'm paying are "less" the tax. :embarasse

Thanks for all the help, really appreciate it.
:beer:
Now, to read up!

Richard