Does this plan work for six figure sum?

masonic

PieHard said:
On pensions contributions, this may be a stupid question but is it simply a case of speaking to my employer or do I go direct to the overall pension provider?

Your employer should be able to adjust the pension contribution coming out of your wages.

PieHard said:

Could I go back and amend 21/22 also as my salary was similar then. I have already done my tax return for last year which I assume means I cannot now revisit but I remember reading you could make pension contributions for a prior year if you hadn't already maxed out. 

You can carry forward unused portions of your £40k annual allowance for 3 years and use them in the current tax year, but the tax relief would be against this year's income tax, so you are limited by your income this year, and if you are only interested in higher rates of tax relief, how much over that threshold you are this tax year.

On the ladder question, this just means having a series of fixed term accounts that mature at regular intervals in order to produce a regular return of part of your capital. However, you opened this thread with a comment about not locking this money away as you intend to use it for a house purchase in 1-3 years. After the mortgage repayment and offsetting  of pension contributions, how much of the remainder needs to be kept accessible for this property transaction?

PieHard

masonic said:
Your employer should be able to adjust the pension contribution coming out of your wages.

I wasn't sure if it would be different as it would be a one off payment rather than increasing my contributions on an ongoing basis. But I'll give payroll a call tomorrow. 

masonic said:

On the ladder question, this just means having a series of fixed term accounts that mature at regular intervals in order to produce a regular return of part of your capital. However, you opened this thread with a comment about not locking this money away as you intend to use it for a house purchase in 1-3 years. After the mortgage repayment and offsetting  of pension contributions, how much of the remainder needs to be kept accessible for this property transaction?

I see, thanks for explaining. I probably need to spend some time on these forums to get up to speed. 

In terms of future house purchase, this was simply a long-held idea that I should have cash available. But thinking further, I plan to use the equity held in my current home alongside a mortgage at a reasonable LTV ratio to fund any new house. Having additional cash funds on hand would be if we wanted to bring down the LTV further or if there were significant renovations required. Perhaps therefore my fear of locking away is somewhat irrational and a product of having got used to having significant sums available recently. 

ChilliBob

Defo look into the pension as others have said, as a higher rate tax payer its a no brsiner. 

As regards investing, if you need the cash to put you in alwet ltv bracket, a s the difference isn't much, it may still be more sensible to invest it. If its done well hy the time you need it, great, a lower bracket. If not, give it a few years and the return will probably compensate and more. 

This is very different situation to someone who has say 100k for a deposit, clearly investing with a 1-3, year horizon then is a bad idea 

masonic

PieHard said:

masonic said:
Your employer should be able to adjust the pension contribution coming out of your wages.

I wasn't sure if it would be different as it would be a one off payment rather than increasing my contributions on an ongoing basis. But I'll give payroll a call tomorrow.

For contributions beyond your next couple of months salary, you may need to open and fund your own SIPP. It depends whether your employer scheme supports direct contributions from members, but payroll will normally know things like this. You have the option of course of increasing contributions on an ongoing basis and offsetting the lost income with your windfall money. If contributing via salary sacrifice, this saves a bit of NI as well as income tax. It depends on whether next years income will be similar to this year.

PieHard

ChilliBob said:

This is very different situation to someone who has say 100k for a deposit, clearly investing with a 1-3, year horizon then is a bad idea 

Yes, it's crazy that the difference has only occurred to me having "talked" it through on here. 

I know I've veered somewhat from my initial query but this has been hugely helpful in getting my head clearer with what I need. I still think I need to spend some time going through the threads on these forums but I already feel more comfortable with where I need to focus. 

Appreciate all the comments and explanations. 

PieHard

masonic said:
It depends on whether next years income will be similar to this year.

Unfortunately probably not! 

Albermarle

I know I've veered somewhat from my initial query but this has been hugely helpful in getting my head clearer with what I need

Often after some probing, many new posters realise that there is more to their situation, than just the original query.

I still think I need to spend some time going through the threads on these forums but I already feel more comfortable with where I need to focus. 

That is how most, ( not all ) of us have significantly improved our knowledge in this area.

P1Fanatic

My companies pension is with Scottish Widows but there is a Pension Management company in the middle. Normally its just a case of emailing them with my pension details and asking them to increase my contribution % from next payroll date. However at least with mine I can increase it any time I want but apparently can only decrease it during a 1 month window each year (which I only found out about after about the 7th time of emailing them with increases and no one ever mention that). So something to be aware of / check with yours.