Pensions make my head hurt!

wend33

Golactico said:

I can't offer levels of detail and expertise that others have, but my experience may be of some help to you.

I am a civil servant too and have been making regular contributions to the CSAVC scheme, now run by L&G (was Scottish Widows up to a few years ago). A while ago, I had a lump sum that I wanted to pay into my CSAVC account and I duly sent them a cheque for this amount to be added to my account. The amount was added, pound for pound, with no tax relief top up. I was told that I would need to apply for tax relief on this lump sum amount separately to HMRC, which I did. However, it transpired that I had made a stupid error in paying in the lump sum in one go, in a single tax year. In the tax year that it was paid in, I had paid less in tax than the 20% of the lump sum figure that I was expecting back. If I'd just split the lump sum over 2 tax years, I'd have been about £1K better off.

I know I'm not going to get the best out of this because it's all very last minute, I started the ball rolling with the intention of jumping ship 9 months later!

Dazed_and_C0nfused

wend33 said:

Dazed_and_C0nfused said:

wend33 said:

hara____ said: 

- and with the lump-sum payment, I think there may be more than one option available to members. Did you ask your employer to make the payment via payroll or did you make the payment direct to the AVCS provider (L&G?) ?

The lump sum I made directly to L&G so it hasn't had any tax relief applied to it as yet, I assume if I was to get any I would have to complete a tax return?

Not normally no.

How much was the lump sum payment?

And how much pay do you think your P45 will show when you've received your final pay in January/February next year?

The lump sum was from a savings account that matured and was £30k so more than I would be able to get tax relief for.  L&G said that any tax relief I might be due was my job to sort, the won't do it for me.
The final amount of salary before any deductions by the end of January should be about £28.8k

After taking into account your Alpha pension contributions that could be in the region of £27,230.  But any regular AVC's which are on your payslip will reduce that further and mean you didn't pay as much tax in the first place.

So your tax could be £2,930 at most but possibly quite a bit less depending on the regular AVC's you paid in this tax year.

The lump sum of £30k will mean you can almost certainly claim back all of the tax you have paid in the current tax year (you make a claim to HMRC).

A lump sum contribution of £15k or so would have got you the same tax refund 😥