Hi all, I have a 5% (company matching) pension. Saving also. Could I do more?

LiveOnce

Hi all,

I am educating myself more about pensions.

I have a pension scheme at work where I give 5% and company matches it.

What could I be doing more in terms of pensions?

I regularly save in a savings account.

Not sure if there is a more savvy way to approach pensions so I am asking. Thank you in advance for helping

bigadaj

Is that the maximum the comoany will contribute, if not then increase it.

Are you a standard or higher rate taxpayer?

What other savings do you have, are you a homeowner or looking to become one, do you contribute to isas?

LiveOnce

• Thats the max my company can contribute

• High rate taxpayer I think
  
• ISA
  
• 123 Savings Account
  
• I am a home owner.

Number75

You only think you're a higher rate tax payer?
That's something to find out for sure, because if you are, then paying AVCs to your work pension or setting up a private SIPP will get you 40% tax relief. If you're happy to tie the money up, then I personally would do that over an ISA.

xylophone

High rate taxpayer I think

You think....why don't you know?

http://www.moneysavingexpert.com/banking/tax-rates

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

TrustyOven

xylophone wrote: »

You think....why don't you know?

Because you could be right near the threshold, but overtime and savings income could push you up to the 40% band.

atush

But remember 5% of salary going into pension, so that might have taken them out if HRT already? We cant say w/o the salary level.

I would say either pension, S&S isas (instead of cash) for extra savings- or both.

LiveOnce

Hi all,

I am in the higher tax bracket, i.e. 40%.

atush

Yes, we got that. But by how much?

For instance, if you earn 45K, and put 2250 (ie 5%) into a pension each year, that alone would take you out of HRT?

If you dont want to tell us (and you've been asked already) then subtract your annual pension contribution, and see how far over the HRT band you still are. Then put that amount into a pension (or 80% of that amount).

Anything else left to save (apart from your reg cash savings) can be put into a S&S isa or into a pension getting only BRT relief.

LiveOnce

Hi,

I would still be within the HRT after my 5% yearly contribution.

Not sure how an S&S ISA works or BRT relief so any useful guides would be handy to read.

atush

I suggest you should put enough into your/a pension to take yourself out of HRT altogether.

A S&S isa is just like a pension. It is a wrapper for investments. The difference is in the taxation.

Like pensions you can hire an IFA to set one up and choose investments, or you can DIY by choosing a platform and then picking some investments.

BRT relief is automatic, the pension company gets it for you. HRT relief is different, the BRT is added by the pension company, and your tell HMRC about the contributions have made/are making and they adjust your tax code to take less tax out.