Learning to walk before I run

edinburgher

@Paspatur - those taxed at 19% have their contribution topped up to 20% for pension tax relief. But right enough, your positivity is warranted and the 19% band does save me c. £20/year vs. Someone outside of scotland. Unfortunately the 21% band costs me a good bit more than £20! 

I'm in the lucky position to be bumping against higher rate tax (about £1,000 off), my understanding is that any contributions to a private pension attract tax relief at my highest tax band (21%). Unfortunately gummint(s)/pension providers haven't managed to have a "I am in Scotland" tick box yet 😉

 https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief#:~:text=If your rate of Income,types of overseas pension schemes.

Paspatur

Wow sounds really complicated, I was well into the 40% tax bracket and paying the maximum £40k per year into pension before I retired but luckily that was all on a company pension so dealt with by PAYE. I think 19/20/21/41 rates came in after I retired in 2015??

edinburgher

@Paspatur - 2018 I think for the "new" tax bands. PAYE does make everything easier if you're trying to pay big wodges into a pension, most of my pension provision is DB and the SIPP is just a top up really. Still - £40k a year into your pension? Kudos

savingholmes

I can only dream of £40k into my pension. Maybe one day

Paspatur

It was only for the last 3 years of my employment and did not cost me £40k due to company contribution of 12% and salary sacrifice reducing or removing 40% tax
A late catch up after they closed the DB pension 2 years after I joined the company and I stupidly did not increase my DC contribution from the standard %
Didn't mean to sound like I have a huge pension pot, I don't
My DB pension is only £2,715 per annum
I take an income from the SIPP but also pay in the £4k per annum
Part time job salary is needed and hopefully I can do it until State Pension in 4 years time
If I knew how long I will live I could spend more of the SIPP

edinburgher

@Paspatur - 12% employer contribution sounds good - but not nearly as good as the DB scheme they closed! My first "real" job used to double the employee contribution up to 5% (so 10% from them on top for 15% total). I sometimes wonder how my DC pension would look these days if I'd stuck with that... Still, I have the unicorn that is a 100%+ funded DB scheme, mustn't grumble 

Salary sacrifice is a boon as well, Mrs E gets it and 26% of her wages will be going into the scheme as of May. Our aim is to create a DB-like level of pension for her moving forwards, but it is expensive

Paspatur

Again the 12% was not for the whole duration of the DC, 6% under age 40, 9% under age 50 and 12% over age 50
I was 44 when they closed the DB so was on 9% then 12%
All part of the 'blackmail' when closing the DB scheme which was sufficently funded to keep going but was removed in an 'almost' illegal TUPE transfer between 2 companies with the same owner

Salary sacrifice is brilliant, I also got 50% of the employer NI saving once a year

26% is great but yes it is expensive, I have a brother and sister on unicorn DB pensions and they get a very decent amount a month for paying in 'sweetie' money

edinburgher

I had nothing else to spend my pocket money on - another £80.84 paid into my SIPP (£101.05 after tax relief). Mrs E has started making noises about wanting to support girls with education and a nest egg. I think she thinks we're the Astors

I have done my first NW spreadsheet in about a year. The numbers are pleasantly up in some areas (for example, DB pensions), up in other areas (DC pensions) and understandably down in others (home equity). I'll not be sharing this month as I haven't really got my head back into that sort of financial recording, but will do an update at the end of May as a wee thought exercise.

savingholmes

Well done on sipp payment

edinburgher

My first taste of positive inflation - my feed in tariff (FIT) rate has gone up by 7.5% (April RPI). No payments due until June, but better than a poke in the eye with a sharp stick

I have been to my running class this morning, then took DD swimming, now I'm cooking a nice robust Sunday roast (ham, roasties, slow cooked red cabbage in red wine and HM gravy).