What is considered as Excessive Pension Payment - post discharge.

jonny_wm

I have recently been discharged from bankruptcy in Scotland (Sequestration), and I am subject to a Debt Contribution Order, which was set at NIL as the time of my bankruptcy as I was not working, but will be in force for a further 3 years.

I am in the process of transitioning from being largely on benefits to a better paid job where there is a pension scheme. The employer will match up to 9% contribution as salary sacrifice. I am in my early 50's, no assets aside from a small pension pot (circa 150k), and I am thinking of setting aside quite a large proportion of my salary for my pension to benefit from both the employers contribution and the tax advantages. The figure I have in mind is 20% (around 16k) of my gross salary. 

From what I can tell excessive is left undefined and I am wondering if anybody has experience in this area and whether the AIB (the OR equivalent in Scotland) is likely to accept this figure. 

Thanks

luvchocolate

Hi I'm not sure about the rules in Scotland but that amount does seem high. 
Hopefully someone will be along soon although the forum is quiet at the weekend 

sourcrates

I may be wrong, but once discharged, are you not free of all restrictions ?

molerat

sourcrates said:

I may be wrong, but once discharged, are you not free of all restrictions ?

Free of restrictions but the court can make a Debtor Contribution Order to cover up to 4 years from the date of sequestration - up to 3 years after discharge.  https://www.mygov.scot/bankruptcy/your-income

luvchocolate

I read the OP was paying into the equivalent of an IPA.
As said Scotland is different..didn't we used to have a poster in the know?

molerat

I suspect anything in excess of the accepted minimum - 5% - could be considered excessive.

luvchocolate

Mine was 6% and not mentioned....try pushing to 8%?

TheGardener

Many public sector jobs have a compulsory 6 to 8% contribution rate and the emergency services are even higher. Given your age and lack of other savings, you should be able to make a strong case for 9% even if you have to compromise by a percentage point or so. Trying to ensure you are not dependant on the state over and above your state pension should not be classed as 'excessive'. 
I know there are differences in Scotland but at a similar age I made a case for 8% in England and the OR was fine with it - not even questioned.