Diverting £50k of salary into pension fund to claim welfare benefits

Gracchus_Babeuf

gadgetmind wrote: »

I earned more than that in my first year out of uni back in the mid-80s., and year two went even better. Shame about years three and four (long story!) but I did manage to buy my first house at age 24.

And no, it was nothing to do with finance, law, or medicine, though they might have proved less stressful!

Hmmm. A sales related role I assume? Commission payments can be very high. Or maybe trading futures and options?

Gracchus_Babeuf

CSL0183 wrote: »

Recruitment consultant in the offshore oil and gas industry. It is a good salary for the NE of Scotland.

Fascinating. I assume that most of your salary is commission based - are you prepared to face the risk that market conditions will have a big impact on your income?

"It is a good salary for the NE of Scotland" - what a massive understatement!

Gracchus_Babeuf

CSL0183 wrote: »

Please see the figures I posted a few pages back, with a £12k salary plus state related benefits for 3 children my income will be pretty much the same as it is now give or take a couple of hundred £££.

I may not be able to do this for the full 27yrs no, the child benefits will stop when the kids are 18 but even 15 yrs at maximum £50k+ contributions is going to lead to a very good pension pot come 55. 25% tax free cash should be able to buy me a home outright, the state will pay for a roof over my head in the meantime.

I may suffer from a slight drop in standard of living now but the pros far outweigh the cons when you look at the bigger picture. I am effectively saving the majority of my salary every year and taking advantage of our very generous welfare system which enables me to pretty much match the same standard of living I have at the moment.

Of course, I can lose my job should I do this or not but I would rather lose it with a big pension pot;)

I have been enquiring about figures today, my 75% estimation of the WTC/LHA/CTB is pretty much spot on, figures look good, I should be able to pull in a £3k per month income under this plan. Slight drop of where I am now (£3.5k, although £3.3k in 2013 after child benefit disqualification)

10% drop in income but my pension pot is increasing by 550%, (£10k currently, £55k with this plan) This is a no brainer and I shall be pressing ahead with this in the new financial year.

Good luck to you but this whole plan seems very risky and is based on many assumptions. Keep us updated on your progress.

Also, our welfare system is only very generous if you have children. No children and it would be a totally different story.

iltisman

Good idea, dead beats handouts becomes a workers bonus . Only mistake blabbing about it on here.

CSL0183

Gracchus_Babeuf wrote: »

Fascinating. I assume that most of your salary is commission based - are you prepared to face the risk that market conditions will have a big impact on your income?

"It is a good salary for the NE of Scotland" - what a massive understatement!

Well not really considering Aberdeen and its Oil and Gas market. A pretty much mediocre salary up here in terms of what some are earning.

It's enough for me though, live within your means and all that.

Gracchus_Babeuf

iltisman wrote: »

Good idea, dead beats handouts becomes a workers bonus . Only mistake blabbing about it on here.

Rubbish. Wefare benefits are not designed to boost the income of higher rate taxpayers - this guy is cleverly trying to fiddle the system legally - no reason why he shouldn't but this is not how it's supposed to work. The flaw is that there is now a very high limit on pension contributions, but I'm pretty sure that this will be closed once it appears that this can be abused.

CSL0183

Gracchus_Babeuf wrote: »

Good luck to you but this whole plan seems very risky and is based on many assumptions. Keep us updated on your progress.

Also, our welfare system is only very generous if you have children. No children and it would be a totally different story.

Thanks. Yes I agree, you need children to reap the awards of our generous nation, we cant be having child poverty now can we;)

I'll pop by again next April/May time and update with all the facts and figures.

I'll bow out of this now, thanks for all the input guys. (good and bad)

Gracchus_Babeuf

CSL0183 wrote: »

Well not really considering Aberdeen and its Oil and Gas market. A pretty much mediocre salary up here in terms of what some are earning.

It's enough for me though, live within your means and all that.

I'm thinking more of Scotland as a whole, not just the oil and gas industry, which is a pretty specialised field.

What's the average salary in Scotland? £25k or so, maybe less.

Chick_Loves_Thrift

I've only read page one but anyway.. If you were to do this OP It wouldn't be fair those who are on benefits for real, genuine reasons. You have that huge salary, asking for any more from the government is despicable. It's screwing the system even if it IS legal.

atush

gadgetmind wrote: »

Agreed 100%.

What we're seeing is the fundamental problem with progressive taxation and benefits, where some bask in the state's largess while others only feel its bitter lash as they toil long hours, forever dreaming of sugar candy mountain.

Sorry, dunno what came over me there!

Anyway, if the state allows one to both bask and get the sugar, so be it.

Gadget- waxing very poetic lol.