Best way to start off with £190k

Albermarle

MX5huggy said:

£180k salary plus 75% bonus, non working wife. All bets are off go and see an IFA. Should be able to guide you to some tax efficient savings beyond ISA’s and Pensions. 

I was thinking the same, as soon as I saw that pretty massive salary . Probably one of the largest that I have seen from a poster on this forum, especially if the 75% bonus pays out !

wheelygreat

Bimbly said:

wheelygreat said:

so we should be putting that £3k per month into my wifes pension for a start? make it up to £40k p.a. shouldnt be too hard.

So if we put money into ISAs each year and max the £40k into my wifes pension that should be a good platform to build on, if we hold back, say, £50k for any emergencies etc..

You cannot do that. Your wife can put all of her earned income into a pension in any financial year up to a maximum of of £40k. But if she is not working, she has no earned income and that avenue is therefore closed.

From what you say, she hasn't quite given up work yet, so the amount of her earned income this financial year could still be put into a pension. For example, if she is paid £1,000 per month and worked April, May & June this financial year, that means she could put £3,000 into the pension maximum (including the tax relief!).

From next year if she's still not working, as NedS says, pension contributions are limited to £3600 gross (£2880 net).

Oops - I see what you mean - yes i think i need to go see an IFA - such a minefield!

Thanks for the input.

wheelygreat

MX5huggy said:

£180k salary plus 75% bonus, non working wife. All bets are off go and see an IFA. Should be able to guide you to some tax efficient savings beyond ISA’s and Pensions. 

Thanks - yes i think ill go see an IFA - this all seems so complicated - they should teach us more of this stuff in school! For someone that is involved in detailed research in a technical field and got 2 degrees from university, this all seems way beyond me!

wheelygreat

Albermarle said:

MX5huggy said:

£180k salary plus 75% bonus, non working wife. All bets are off go and see an IFA. Should be able to guide you to some tax efficient savings beyond ISA’s and Pensions. 

I was thinking the same, as soon as I saw that pretty massive salary . Probably one of the largest that I have seen from a poster on this forum, especially if the 75% bonus pays out !

Ha, am new to the salary, not always been that way, just got lucky with a particular specialism that a tech company is looking for.  When i worked out what the income taxes would be, trust me i was a bit in despair...

NedS

wheelygreat said:

Albermarle said:

MX5huggy said:

£180k salary plus 75% bonus, non working wife. All bets are off go and see an IFA. Should be able to guide you to some tax efficient savings beyond ISA’s and Pensions. 

I was thinking the same, as soon as I saw that pretty massive salary . Probably one of the largest that I have seen from a poster on this forum, especially if the 75% bonus pays out !

Ha, am new to the salary, not always been that way, just got lucky with a particular specialism that a tech company is looking for.  When i worked out what the income taxes would be, trust me i was a bit in despair...

Paying large amounts of income tax is generally a good thing as it implies you are earning a very good salary. Better to be a high rate tax payer than not

Albermarle

NedS said:

wheelygreat said:

Albermarle said:

MX5huggy said:

£180k salary plus 75% bonus, non working wife. All bets are off go and see an IFA. Should be able to guide you to some tax efficient savings beyond ISA’s and Pensions. 

I was thinking the same, as soon as I saw that pretty massive salary . Probably one of the largest that I have seen from a poster on this forum, especially if the 75% bonus pays out !

Ha, am new to the salary, not always been that way, just got lucky with a particular specialism that a tech company is looking for.  When i worked out what the income taxes would be, trust me i was a bit in despair...

Paying large amounts of income tax is generally a good thing as it implies you are earning a very good salary. Better to be a high rate tax payer than not

As the saying goes , better to have 50% of something than 100% of nothing .

kidmugsy

wheelygreat said:  £190k cash sitting in a bank account getting 0.01% interest...

£180k p.a. and I have up to 75% bonus potential 

Good grief; I should charge you for my remarks.  Anyhoo: your pension contributions.  The dreaded "tapering" of annual allowance for the seriously has recently been eased:

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/tapering-of-annual-allowance-for-high-incomes/

It looks as if you will still be able to make a mighty annual contribution, especially if you can also carry forward some unused annual allowance for the three previous tax years.

Now then, a word about your existing pensions.  Don't move them! Don't contribute any more to them!  That's because the government is part way through deciding how to implement the long forecast increase in the age at which one can draw a pension.  It's possible that your existing pensions will, in the end, retain age 55 as long as (i) they existed, and (ii) were not added to, before some magic cut-off date.  So your new pension contributions should be directed to new pension(s), at least until the new legislation is in place.  You'll hear all about that at the time because on that salary you are bound to become an avid reader of the personal finance pages in the papers at the weekend. (I've always found the Telegraph and the FT best.  For some reason The Times is feeble, and the Guardian once gave me the worst financial advice I've ever had.)

barnstar2077

kidmugsy said:

wheelygreat said:  £190k cash sitting in a bank account getting 0.01% interest...

£180k p.a. and I have up to 75% bonus potential 

Good grief; I should charge you for my remarks.  Anyhoo: your pension contributions.  The dreaded "tapering" of annual allowance for the seriously has recently been eased:

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/tapering-of-annual-allowance-for-high-incomes/

It looks as if you will still be able to make a mighty annual contribution, especially if you can also carry forward some unused annual allowance for the three previous tax years.

Now then, a word about your existing pensions.  Don't move them! Don't contribute any more to them!  That's because the government is part way through deciding how to implement the long forecast increase in the age at which one can draw a pension.  It's possible that your existing pensions will, in the end, retain age 55 as long as (i) they existed, and (ii) were not added to, before some magic cut-off date.  So your new pension contributions should be directed to new pension(s), at least until the new legislation is in place.  You'll hear all about that at the time because on that salary you are bound to become an avid reader of the personal finance pages in the papers at the weekend. (I've always found the Telegraph and the FT best.  For some reason The Times is feeble, and the Guardian once gave me the worst financial advice I've ever had.)

I was under the impression that as long as you had opened the pension before the report was released in Feb that you would be okay for 55?

DragonCapsule

Max out you and your partners stocks and share isa's every year. Won't be too long until you hit the pension allowance of 1.1m.

kidmugsy

barnstar2077 said:

kidmugsy said:

wheelygreat said:  £190k cash sitting in a bank account getting 0.01% interest...

£180k p.a. and I have up to 75% bonus potential 

Good grief; I should charge you for my remarks.  Anyhoo: your pension contributions.  The dreaded "tapering" of annual allowance for the seriously has recently been eased:

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/tapering-of-annual-allowance-for-high-incomes/

It looks as if you will still be able to make a mighty annual contribution, especially if you can also carry forward some unused annual allowance for the three previous tax years.

Now then, a word about your existing pensions.  Don't move them! Don't contribute any more to them!  That's because the government is part way through deciding how to implement the long forecast increase in the age at which one can draw a pension.  It's possible that your existing pensions will, in the end, retain age 55 as long as (i) they existed, and (ii) were not added to, before some magic cut-off date.  So your new pension contributions should be directed to new pension(s), at least until the new legislation is in place.  You'll hear all about that at the time because on that salary you are bound to become an avid reader of the personal finance pages in the papers at the weekend. (I've always found the Telegraph and the FT best.  For some reason The Times is feeble, and the Guardian once gave me the worst financial advice I've ever had.)

I was under the impression that as long as you had opened the pension before the report was released in Feb that you would be okay for 55?

Nobody knows: that's the point of waiting for the legislation.  Maybe it will be in the Finance Act of 2022 but maybe they'll try and legislate before the end of the 21/22 tax year.