Re-investing Monthly CS Pension ill Health

TheMillions

I had a preserved 16 year CS Classic Pension (1991 - 2006) which just over 3 years ago I claimed early payment in my mid 40’s for ill Health. My lump sum and following monthly payment has been just saved for the entirety so far, and has not been touched. I have been reading further about re-investing this into a pension, could anyone advise me further if you are able to do this with the monthly pension I receive, or any other advice on this.

Dazed_and_C0nfused

Do you currently have any pensionable earnings (usually a job, self employment or share in a business partnership)?

TheMillions

Dazed_and_C0nfused said:

Do you currently have any pensionable earnings (usually a job, self employment or share in a business partnership)?

I also receive a basic dir salary for a part opened company, so only pensionable earnings are dir sal + CS Pen (This combined is just over £12,500) so pay a small amount of tax 

Dazed_and_C0nfused

The pension isn't pensionable earnings.

It's only the directors salary which would be taken into account when determining how much you could contribute (gross) to a new pension.

Is the directors salary more than £3,600?

TheMillions

Yes more than

Albermarle

So whatever the Directors salary is, you can contribute that gross to a pension.
Which means you can contribute 80% of your salary, and the pension provider will add 20% tax relief ( even though you are not paying any tax )

TheMillions

Albermarle said:

So whatever the Directors salary is, you can contribute that gross to a pension.
Which means you can contribute 80% of your salary, and the pension provider will add 20% tax relief ( even though you are not paying any tax )

I am then assuming that the “pension fund” would then not be accessible until the relevant age 55, 56 57? (Not sure what the age is /or when it increased).. Just thinking that the money would be tied up and not accessible as I am only in my 40’s?

mcn99

If you are a company director, can you not get your company to make the pension contribution.

If you own or part own a company, then getting the company to make the payment is often the way to go, then you are not limited by your earnings and can use the full 40K limit. There is obvious a number of things u need be aware of, talk to your company accountant.

MallyGirl

TheMillions said:

Albermarle said:

So whatever the Directors salary is, you can contribute that gross to a pension.
Which means you can contribute 80% of your salary, and the pension provider will add 20% tax relief ( even though you are not paying any tax )

I am then assuming that the “pension fund” would then not be accessible until the relevant age 55, 56 57? (Not sure what the age is /or when it increased).. Just thinking that the money would be tied up and not accessible as I am only in my 40’s?

yes the standard age restriction of the time will apply so the money will be locked up. There are many aspects to consider around putting new money in a pension - whether your ill health is significantly life limiting, whether you want some of your assets to be outside of your estate for inheritance tax purposes, bound to be more.

Albermarle

TheMillions said:

Albermarle said:

So whatever the Directors salary is, you can contribute that gross to a pension.
Which means you can contribute 80% of your salary, and the pension provider will add 20% tax relief ( even though you are not paying any tax )

I am then assuming that the “pension fund” would then not be accessible until the relevant age 55, 56 57? (Not sure what the age is /or when it increased).. Just thinking that the money would be tied up and not accessible as I am only in my 40’s?

The basic trade off is that pensions get beneficial tax treatment, but are not accessible until your late Fifties.
In your OP you mentioned investing in a pension specifically.

TheMillions

MallyGirl said:

TheMillions said:

Albermarle said:

So whatever the Directors salary is, you can contribute that gross to a pension.
Which means you can contribute 80% of your salary, and the pension provider will add 20% tax relief ( even though you are not paying any tax )

I am then assuming that the “pension fund” would then not be accessible until the relevant age 55, 56 57? (Not sure what the age is /or when it increased).. Just thinking that the money would be tied up and not accessible as I am only in my 40’s?

yes the standard age restriction of the time will apply so the money will be locked up. There are many aspects to consider around putting new money in a pension - whether your ill health is significantly life limiting, whether you want some of your assets to be outside of your estate for inheritance tax purposes, bound to be more.

Yes, there our a number of factors to consider, and one of the reasons for me saving the money currently is to ensure that my decreasing health conditions can be catered for accordingly, so I think I need to make further considerations as to the next step.