Being made redundant

kidmugsy

billpaul812 wrote: »

So I put the £23K (that is left after deduction of the tax free £30K and the 40% tax on the remainder tax into a PP or SIP and then i will be able to reclaim the £14K tax that my employer deducted?

Not quite. You contribute 80% of the £37k (£29.6k), the taxman pays the other 20% into your pension fund (£7.4k), and you reclaim the further 20% for your pocket (£7.4k).

billpaul812

If I went to an IFA to help me set that up how much would be a reasonable charge for their services?

xylophone

Have you obtained a state pension statement?

https://www.gov.uk/check-state-pension

With regard to the IFA, you could ring round for quotes.

https://directory.moneyadviceservice.org.uk/en

Or you might open a SIPP or other personal pension.

http://www.hl.co.uk/pensions/sipp

https://www.cavendishonline.co.uk/pensions/

Relief at source will mean that basic rate tax relief will be claimed by the provider.

You will need to contact HMRC to reclaim the higher rate tax relief.

billpaul812

Yes I have checked my state pension position but I don't get that for nearly 4 years.

Silvertabby

Yes I have checked my state pension position but I don't get that for nearly 4 years. Posted by billpaul812

xylophone meant have you checked the amount of your State pension. As you were contracted out for at least the time you were in the LGPS (until 2016) then you are unlikely to get the full single tier £160 per week.

xylophone

What does your statement say?

billpaul812

I'll post back with what my state pension statement says but the .gov service is unavailable at the moment. My recollection was that it was £140 ish, but can't recall if that was the current or predicted value.

billpaul812

State pension forecast is £145 a week which is dependent on me continuing to pay NI, which I think I will stop paying now that I am drawing my pension?

Is there anyway to get a statement of my current position or am i missing something?

Silvertabby

State pension forecast is £145 a week which is dependent on me continuing to pay NI, which I think I will stop paying now that I am drawing my pension?

Is there anyway to get a statement of my current position or am i missing something? Posted by billpaul812

Assuming you are about 62 then, if you don't pay any further NI, your current State pension will be something like £127 per week.


However, you could still get £145 by paying voluntary Class 3 NI contributions.


In round figures, that would cost you £3K (£750 per year for 4 years) which is a very good return for an extra £18 per week of additional State pension for the rest of your life. Even if you pay tax, making this £18 £14.40, then you will break even after just 4 years.

xylophone

If you get a job after redundancy then it is likely that you will be earning enough to pay NI up to state pension age.

It is likely that you have already earned enough in this tax year and therefore paid enough in this tax year for it to be a qualifying year.

You can check the current position on line.

If you do not return to work or do not earn enough for NI paid or credited, then you can make voluntary contributions.

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf