Some more pension advice please?

Pat38493

In am earlier thread I seem to remember  @Nelson1100 mentioned that his salary was 52k I think so only a small amount would be taxed at 40% so I suspect the relief on that is already covered in his employer pension?

The important thing to remember for this discussion is that pensions are good as long as you spread the withdrawals over multiple years as the withdrawals are subject to income tax above the 25% tax free amount.  If you suddenly decide to withdraw your entire pension in the same year you will pay a lot of tax and that’s where you could end up worse off than if you had never put the money into the pension.  The whole system gives you an advantage if you take the money out slowly over many years.

Qyburn

Nelson1100 said:
 

My payroll dept are saying I can get my wages paid in the usual way and then just pay 100% into L&G myself but I won't get the tax benefits unless I apply to HMRC.
 

It's worth making contact with L&G well in advance before making a contribution. My provider asked me to go through a few ID checks first.

Aside from that you pay them say £8K, they will add the £2K tax relief themselves. If your paying 40% tax you'll get back the extra 20% when you do your tax return.

Dazed_and_C0nfused

Qyburn said:

Nelson1100 said:
 

My payroll dept are saying I can get my wages paid in the usual way and then just pay 100% into L&G myself but I won't get the tax benefits unless I apply to HMRC.
 

It's worth making contact with L&G well in advance before making a contribution. My provider asked me to go through a few ID checks first.

Aside from that you pay them say £8K, they will add the £2K tax relief themselves. If your paying 40% tax you'll get back the extra 20% when you do your tax return.

There isn't an "extra 20%" though.

Higher rate tax relief is only given to the extent higher rate tax was due in the first place.

Which may be less than £2,000 which would be taxed at 40% in the op's case.

Mutton_Geoff

I get the shivers when I hear of Allied Dunbar, Hambro's, Zurich etc. Mark Weinberg of course now heading up SJP