Auto enrolment on to new pension after claiming NHS pension and returning to (NHS) work.

Korkyb

SacredStephan said:

Korkyb said:

I understand that paying into this new pension will reduce the tax I pay 

Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.

Is that because the tax relief goes into a NEST "pot" ??

https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/contributions/claim-tax-relief.html 

Apologies if I'm being a muppet!

xylophone

https://www.nestpensions.org.uk/schemeweb/helpcentre/contributions/calculating-contributions/calculate-tax-relief.html#:~:text=The tax relief method we,(Wales, England and N.

"Relief at Source" explained above.

You will be receiving a pension and a salary.

Do you expect to have enough income to be paying higher rate tax?

Marcon

SacredStephan said:

Korkyb said:

I understand that paying into this new pension will reduce the tax I pay 

Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.

This is a very misleading answer.

If you pay £10 into the NHS pension scheme, it's deducted from your gross pay (i.e. deducted before tax).

If you want to pay £10 into NEST, you pay in £8 from your net pay (i.e. after tax has been deducted) and the provider then claims basic rate tax and adds it to your 'pot' with NEST. If you are a higher rate tax payer, you claim any further tax relief direct from HMRC and any higher rate relief is credited directly to you, not added to your pension pot.

Korkyb

xylophone said:

https://www.nestpensions.org.uk/schemeweb/helpcentre/contributions/calculating-contributions/calculate-tax-relief.html#:~:text=The tax relief method we,(Wales, England and N.

"Relief at Source" explained above.

You will be receiving a pension and a salary.

Do you expect to have enough income to be paying higher rate tax?

Between my pension and 8 hours per week salary my income will be over £37k and likely to rise with Pay / Pension rises in the next 6 months.

As I'm in Scotland it is possible that with the extra hours I will likely (be persuaded) to work I might nudge over the Scottish higher rate (£43663).

Korkyb

Marcon said:

SacredStephan said:

Korkyb said:

I understand that paying into this new pension will reduce the tax I pay 

Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.

This is a very misleading answer.

If you pay £10 into the NHS pension scheme, it's deducted from your gross pay (i.e. deducted before tax).

If you want to pay £10 into NEST, you pay in £8 from your net pay (i.e. after tax has been deducted) and the provider then claims basic rate tax and adds it to your 'pot' with NEST. If you are a higher rate tax payer, you claim any further tax relief direct from HMRC and any higher rate relief is credited directly to you, not added to your pension pot.

That makes sense.

I've just recieved my Tax Code Notice and the HMRC have appliied my Personal Tax Free Allowance to my part time job as opposed to my pension (which will be the higher amount).

Does this make any difference or does it all come out in the wash?

.

ManMadeWays

Korkyb said:

Marcon said:

SacredStephan said:

Korkyb said:

I understand that paying into this new pension will reduce the tax I pay 

Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.

This is a very misleading answer.

If you pay £10 into the NHS pension scheme, it's deducted from your gross pay (i.e. deducted before tax).

If you want to pay £10 into NEST, you pay in £8 from your net pay (i.e. after tax has been deducted) and the provider then claims basic rate tax and adds it to your 'pot' with NEST. If you are a higher rate tax payer, you claim any further tax relief direct from HMRC and any higher rate relief is credited directly to you, not added to your pension pot.

That makes sense.

I've just recieved my Tax Code Notice and the HMRC have appliied my Personal Tax Free Allowance to my part time job as opposed to my pension (which will be the higher amount).

Does this make any difference or does it all come out in the wash?

.

My wife is in the same situation as you.

I've told HMRC to apply the tax code to the pension and tax the earnings at basic rate.

Then when she gives up altogether there is no hassle with moving the code over.

Also, she also was 'forced' to join a NEST scheme, more hassle than its worth to say no.

Korkyb

ManMadeWays said:

Korkyb said:

Marcon said:

SacredStephan said:

Korkyb said:

I understand that paying into this new pension will reduce the tax I pay 

Unlike your contributions to the NHS pension (superannuation) your contributions to NEST will not reduce the tax that you pay.

This is a very misleading answer.

If you pay £10 into the NHS pension scheme, it's deducted from your gross pay (i.e. deducted before tax).

If you want to pay £10 into NEST, you pay in £8 from your net pay (i.e. after tax has been deducted) and the provider then claims basic rate tax and adds it to your 'pot' with NEST. If you are a higher rate tax payer, you claim any further tax relief direct from HMRC and any higher rate relief is credited directly to you, not added to your pension pot.

That makes sense.

I've just recieved my Tax Code Notice and the HMRC have appliied my Personal Tax Free Allowance to my part time job as opposed to my pension (which will be the higher amount).

Does this make any difference or does it all come out in the wash?

.

My wife is in the same situation as you.

I've told HMRC to apply the tax code to the pension and tax the earnings at basic rate.

Then when she gives up altogether there is no hassle with moving the code over.

Also, she also was 'forced' to join a NEST scheme, more hassle than its worth to say no.

I'm likely to keep working for a few years so moving the code wont be an issue for a good while yet.

I suppose one benefit to the tax free allowance being applied to my job as opposed to my pension is that I'll "feel" that continung to work is really worth it given there will be minimal tax coming off my "hard earned" beer tokens :-)

.