BT Leaver and Redundancy payments

robin61

DKM1000 wrote: »

Hi Robin, yes, that's very close to the situation. And correct as I see it. I will need to use the headroom I have against my annual allowance for the last three years to ensure I don't exceed the annual allowance limits.

I left on 31July. I probably would have put more into IYF than I did but I didn't have any unused allowance left so I put as much as I could in.

DKM1000

I am reading an opinion elsewhere on this site that the money I put into the BTRSS does not count against the £40K limit because it's an employer's, not an employee's, contribution. I do not yet know whether this is true, and have not assumed it is.

robin61

DKM1000 wrote: »

I am reading an opinion elsewhere on this site that the money I put into the BTRSS does not count against the £40K limit because it's an employer's, not an employee's, contribution. I do not yet know whether this is true, and have not assumed it is.

It does count.

There is a £40k annual allowance. So that refers to the amount of money that can be put into your pension per annum both by you and the employer.

So for 2018/19 you need to include.
1) anything you have put into the BTRSS
2) anything BT has put into the BTRSS for you
3) anything you put into IYF from your leavers payment which actually counts as a payment made to your pension by BT
4) if you have been doing AVC that also counts as does anything you might have put into the special additional contribution which replaces the AVC

I assume you have been in the BT Pension scheme until 30 June ? Before I left, I asked Accenture if that means that there is a pension contribution that needed to be taken into account for the period to 30 June. They said no because of the adjustment made for inflation there would be no growth for that period so that's good news for you although they did stress that was an estimate.

You will probably need to ask them to calculate your pension savings for 2017/18 as that's not available until the next pension statement comes out. I think that is usually about October.

You should be able to get your pension savings for the previous 2 tax years from the statements available via the pension portal.

DKM1000

Thank you Robin61. I calculate the £40K allowance is not a problem, as I have indeed got figures, and thus headroom, for the last three years.


My latest concern is that I believe there is a constraint of the annual pension input not exceeding the annual salary. This year I am only working for BT half the year and don't yet know earnings for the rest of the year. Is this calculated year by year ie 2018-19 input (the BTRSS etc) vs this year's salary? If I do work further in 2018-19, would the target be for my salary to exceed my pension input so avoid tax on that pension input? (And to not contribute to any new pension scheme.)

robin61

DKM1000 wrote: »

Thank you Robin61. I calculate the £40K allowance is not a problem, as I have indeed got figures, and thus headroom, for the last three years.


My latest concern is that I believe there is a constraint of the annual pension input not exceeding the annual salary. This year I am only working for BT half the year and don't yet know earnings for the rest of the year. Is this calculated year by year ie 2018-19 input (the BTRSS etc) vs this year's salary? If I do work further in 2018-19, would the target be for my salary to exceed my pension input so avoid tax on that pension input? (And to not contribute to any new pension scheme.)

It's not your salary that counts it's your earnings.

Look at it this way. The money you want to direct towards the BTRSS via IYF would count as taxable earnings if you chose to take it. Therefore you can't possibly be exceeding your earnings in 18/19.
So the only things you need to take into account are making sure you have carry forward if you exceed the annual allowance and that your total pension doesn't exceed the lifetime allowance of £1, 030,000
Plus if you are taking the tax free 30k and some extra to cover your PILON that extra bit above the 30k is also earnings.