Pension arrears and bad advice from employer

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 906 views
fionitafionita Forumite
2 Posts
Hi All. I work for a British organisation but am based abroad and therefore am not paying income tax (only social security contributions).

Upon joining the organisation in 2012 I initally signed up to their pension provider L&General and paid a month of contributions, but was soon told by my British employer that I was not eligible to continue on the L&G pension scheme as I was a non income tax payer.

My employer said they would pay the equivalent of their contributions into an alternative scheme which I should identify. Stupidly, I "never go round to it" and so missed out on 2 years' of pension contributions.... However, I recently learnt that 2 colleagues in exactly the same position with non tax status have been paying into our organisation's L&General scheme all along. We joined the organisation at exactly the same time...

I contacted L&G and they confirmed that I was eligible to join despite being a non UK tax payer. I feel like I was mislead by my employer (although they did offer me to identify an altnerative scheme). As I started paying into L&G I would like to reactivate my payments to them, but am I entitled to ask my employer to make (matched) contributions to my pension in arrears?

Thanks in advance

Replies

  • TCATCA Forumite
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    fionita wrote: »
    I contacted L&G and they confirmed that I was eligible to join despite being a non UK tax payer.

    Assuming the pension scheme is a registered pension scheme, there are however restrictions as to how much you can pay in when you're overseas (and get tax relief) and I'm not entirely sure that this applies if you're not already a member of the scheme before you go abroad.

    If the rules do apply, your payments into the scheme are still limited (for tax relief) to the maximum of any UK earnings or £3,600 p.a. (i.e. £2,880 net) for only the first 5 years overseas.

    This link below describes the above tax relief restrictions but I've got no idea how things work if you want to pay in and not claim tax relief, on the basis that you wish to gain from employer contributions. As the previous poster said, it's worth having a go with your employer, but I'd advise getting a handle on just what's legally possible from a tax perspective, before chasing them for money.

    http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm13103020.htm

    Maybe try posting here for answer:

    http://www.taxationweb.co.uk/forum/index.php
  • atushatush Forumite
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    or if you were living in say, the USA, they could have contributed their amount to a 401K plan for you under US tax?

    Do you have a union? Can you get more details from those working with you who were allowed to contribute? Were thy allowed more than 2880/3600? Did the employer contribute?
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