Re: NI contributions if buy added pension

jem16

penwise wrote: »

Thanks for that example it really helped.

The only tax code I can see is br/cumulative.

There's no such tax code. do you mean BR Cumulative?

I think I can assume the normal tax allowance of 10000.

Not if the above tax code is BR. If it is why as it means you have no tax-free allowance?

So -
With gross about 1545 and NI about 105 this works out at about 1456 tax paid on 7282 (gross). So mthly I can pay @600 in and get the full tax
Relief.

You seem to be paying about 20% tax - that shouldn't be happening unless this is a 2nd income.

If I had been for example paying into a private pension not through my salary could I have got tax relief on more than this.?

You would also be able to get the tax relief on the £10k.

I thought I had read that you automatically got 20% tax relief in private pensions even though you may not have paid tax on some of it e.g. Your tax allowance.

Thanks

Only if it's a Relief at Source pension - ie usually PP/SIPP or stakeholder. With a company pension paying from gross pay it simply reduces your taxable pay and therefore the amount of tax you pay.

jem16

You seem to have repeated a previous post rather than answer Post 12??

penwise

Sorry I posted duplicate posts

Yes under tax code it says BR/Cumulative

If this means I have no tax allowance I don't know why - I earn 1545/ mth gross and I am a civil servant with no other income. Should I contact my pensions branch about this.

I worked out my figures assuming I had a tax free allowance of 10000 so -
Gross 1545
Ni 104
Residual amount / mth 1440
Residual amount/yr 17282
Tax allowance 10000
Taxed part 7282 ( ie 17282-10000)
Tax paid on taxed part 1456 ( ie 20% of 7282)
Taxed part/ mth 600


Would I be better paying a lump sum to pensions branch to buy the added pension rather than through my salary. Doing it This way I would need to claim the tax back from HMRC. Would I then be able to get tax relief on more.?
Thanks

xylophone

If this means I have no tax allowance I don't know why - I earn 1545/ mth gross and I am a civil servant with no other income. Should I contact my pensions branch about this

What is pensions branch? Do you mean Payroll?

You should contact HMRC as soon as possible.

Telephone number here https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees

It may be that you will need to reclaim tax. How long have you had this code?

Do you have a Notice of Coding?

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

http://www.which.co.uk/money/tax/guides/national-insurance-explained/

jem16

penwise wrote: »

Sorry I posted duplicate posts

Yes under tax code it says BR/Cumulative

If this means I have no tax allowance I don't know why - I earn 1545/ mth gross and I am a civil servant with no other income. Should I contact my pensions branch about this.

No - your tax code has got nothing to do with your pension. Your employer operates the tax code that HMRC has sent to them. You need to phone HMRC immediately and find out why you are on a BR tax code and get it changed. How long have you been on this tax code - check back through your payslips.

Would I be better paying a lump sum to pensions branch to buy the added pension rather than through my salary. Doing it This way I would need to claim the tax back from HMRC. Would I then be able to get tax relief on more.?
Thanks

It won't make any difference as you still will only get back the tax that you paid. So for the £10k personal allowance part you pay no tax so in this kind of scheme you will get no tax relief.

If you used a Personal Pension you would get tax relief on all of it, including the personal allowance part. Using this type of pension may also give you flexibility if you wanted to retire earlier as you could use this pension to fund the time from early retirement until normal retirement age for your Civil Service pension. However it's not guaranteed like the Additional Pension route.

if you intend to pay most, if not all, of your salary into the pension what will you be living off each month?

penwise

Thanks

I am currently on hold on the phone to HMRC

jem16

If you don't get through, best time to phone HMRC is about 7:45am.

penwise

Still holding for HMRC.....

penwise

I am on the wrong tax code HMRC are going to get this fixed.

Thanks for pointing this out.

xylophone

I have a salary of 30000 and 19 years service.

I reach 60 in 2023

https://forums.moneysavingexpert.com/discussion/comment/67537400#Comment_67537400 post 11

You have been employed by the Civil Service for 19 years?

How long have you been on this tax code?

Did it change without explanation/Notice of Coding only at the beginning of this tax year?

With regard to State Pension, you are aware that Contracting Out will end in April 2016?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210299/single-tier-valuation-contracting-out.pdf