Live of savings and max pension ?

kobie

hi
Need some advice.

I have received a windfall of about 100K after I have cleared my mortgage.
So wondering what to do...

Pension - I have a rerasonalble pension fund of 500K, aged 51 so I thought that I'd do this:
Ask my employer to max my pension contributions to 40K from my salary so reducing my NI and tax while I live off the 100K.
If my calculations are correct then my pension investment would be gross so no income tax plus there would be no NI.
I should be able to do this for 3 years and my intention is to retire at 60....

Does that plan seem reasonable ?
Or any other advice welcome.

cheers
K

tacpot12

Seems reasonable. In theory you could pay the £100 straight into your pension using the carry forward rules, but you would end up paying more tax and NI with this route. With your approach, you would be delaying your investment in the markets, but with Brexit on the way I think this is probably a sensible strategy.

Make sure you don't run your savings down to zero, you should keep an emergency fund in cash.

BoGoF

What is your salary?

glider3560

kobie wrote: »

Ask my employer to max my pension contributions to 40K from my salary so reducing my NI and tax while I live off the 100K.

You only reduce the NI if the pension contributions are made via salary sacrifice. If they are deducted in the "normal way" then you will save income tax, but not NI.


In the latter case, you could pay into any pension, not just your employer's and get the tax benefit.

kidmugsy

Answer BoGof!