10 year pension plan

poochops

Albermarle said

As you have not mentioned your actual salary it is not possible to agree or disagree with this figure,

Ah ok sorry, 63k up till last month, just had small increase to 64.5k from this month, 6.1k car allowance. 

poochops

Terron said:

I’ve got a closed final salary pension which will pay £15.5k pa at 65, and is linked to inflation or something like.

How "like"? The small print can make a big difference.

Good call. RPI up to 5% until 65, inflation up to 3.5% after. So not bulletproof, thanks for pointing it out. 

poochops

Pretty basic question, forgive my ignorance but is tax relief given on my contribution only, or my employers as well? 
And I gather the 40k annual limit is based on employer, employee and tax relief totals, is that right? 

Thanks.

NottinghamKnight

All pension contributions, within limits, are gross, so tax relief is available on all sums. Your employer can then claim this as a business expense against corporation tax etc
£40k limit is gross total so includes all of the sums paid into the pension. 

Albermarle

poochops said:

Pretty basic question, forgive my ignorance but is tax relief given on my contribution only, or my employers as well? 
And I gather the 40k annual limit is based on employer, employee and tax relief totals, is that right? 

Thanks.

Your employer contribution does not get tax relief and yes the £40K totals includes all those three elements .
Ah ok sorry, 63k up till last month
In this case higher rate relief is only available on the £13K . Basic rate releif on anything else .

kangoora

After upping your pension contributions to maximise the SS and 40% tax uplift I would be pouring all spare pension cash into wifes pension to enable her to use as much of her personal allowance as possible in retirement. We left it too late/wasn't aware of it and until my wife gets her state pension she won't be using her full personal allowance for a number of years

poochops

Albermarle said:

Your employer contribution does not get tax relief and yes the £40K totals includes all those three elements .

Thanks, there’s two different answers yours and nottinghamknights, one must be correct... ;-)

Albermarle

poochops said:

Albermarle said:

Your employer contribution does not get tax relief and yes the £40K totals includes all those three elements .

Thanks, there’s two different answers yours and nottinghamknights, one must be correct... ;-)

Well I think I am right 

AlanP_2

poochops said:

Albermarle said:

Your employer contribution does not get tax relief and yes the £40K totals includes all those three elements .

Thanks, there’s two different answers yours and nottinghamknights, one must be correct... ;-)

Whilst both are technically correct the fact that your employer can offset their contribution to your pension against their profits and hence their tax bill doesn't matter to you in the slightest.

The £40k is the value of the contributions to your pension.

Bemma

This may be way off…  but mention you contribute 8% and your company 9%.  You £420, total £900.

You also mention "My employer doesn't give me back any of their NI saving, but infer its been factored as part of their contribution"

Those are very strange ratios 8%/9%:  Are you sure it's not 8% matched contribution plus 13.8% employer NI top up?

£420 * 13.8% = £57.96

£420 + £420 + £57.96 = £897.96

 It can very unclear with SS what savings you're making and where it's coming from.