Help me understand pensions please?

SteL

But if I had pension contributions taken from my net pay then the government would contribute also wouldn't they?

Linton

SteL wrote: »

But if I had pension contributions taken from my net pay then the government would contribute also wouldn't they?

HMRC would refund the 20% tax you had paid on the money into the pension pot.

GhIFA

SteL wrote: »

But if I had pension contributions taken from my net pay then the government would contribute also wouldn't they?

By using Salary Sacrifice you don't pay tax on the amount of salary you give up, so it puts you in the same position.

zagfles

SteL wrote: »

I have heard recently (and I don't know if this is a new thing or not or indeed whether it is true) that your private pension is deducted from your state pension. Can anyone clarify this as it would seem pointless to pay into a private pension if it is only going to be deducted from my state pension :huh: very confusing!

This is probably referring to state pension credit, which tops up your pension income to £142.70 (or £217.90 for a couple), any private pension will reduce/eliminate pension credit.

Stochasticity

Linton wrote: »

It is complicated.....

There are at the moment two state pensions:

1) Basic State Pension, currently around £107 IIRC

...

2) Additional State Pension

As zagfles says, there's also currently

3) State Pension Credit.

In short:

- Basic state pension is not affected by private pensions.
- Additional state pension may be affected by private pensions, in certain circumstances.
- State pension credit is always affected by private pensions (and most people get no state pension credit at all because they have sufficient other income).

For the purposes of the OP, it's not really necessary to go into any further detail than that just because, from 2017, there will only be one state pension (an increased basic state pension). The additional state pension and state pension credit will become historical artefacts.

Because the one state pension from 2017 (like the current basic state pension) will not affected by private pensions, the OP should carry on making private pension provision.