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Pension contribution

Options
Hi, I will have some excess funds available from April, option 1 should I increase my work pension contribution and reduce my payable tax or option 2 is to out this in a private pension and gain the additional 25% from the government or option 3 I put this in to a savings but not necessary an ISA. Any advice would be appreciated,

KR,

Richard.

Comments

  • Albermarle
    Albermarle Posts: 22,819 Forumite
    First Anniversary First Post Name Dropper
    Options
    Without knowing anything about you it is difficult to offer any sensible comments.
    For example
    Your age?
    Mortgage?
    Other savings and investments ?
    Plans for early retirement/size of current pension pot? etc 

    Also could you clarify how you contribute to  your work pension pot, by salary sacrifice ( for example)
  • mark55man
    mark55man Posts: 7,947 Forumite
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    Options
    Hi @Richard27229 just adding a comment as I think there is more to discuss.

    I would suggest that using salary sacrifice was the better idea, as you get the same amount of relief in option 1 you never pay the tax in option 2 you pay the tax and reclaim it.  if you are a higher rate tax payer the sacrifice is easier + doing option 1 by salary sacrifice means you save NI on the amount sacrificed (sometimes the higher contribution triggers some additional company contribution) 

    The comment above is true though we don't really know enough to comment on your situation but the above is what I am doing maximising salary sacrifice and reducing tax and NI 
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • dunstonh
    dunstonh Posts: 116,830 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    Hi, I will have some excess funds available from April, option 1 should I increase my work pension contribution and reduce my payable tax or option 2 is to out this in a private pension and gain the additional 25% from the government or option 3 I put this in to a savings but not necessary an ISA. Any advice would be appreciated,
    No advice here as advice is not allowed.    However, a discussion point would be that options 1 and 2 are variations of the same theme and we cannot tell which is best without knowing the detail of the workplace pension.  Option 3 suits a totally different objective to 1 and 2.      i.e. if either option 1 or 2 meet your objective then option 3 cannnot.  (and vice versa).




    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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