Pension contribution 14 February at 7:04PM in Pensions, annuities & retirement planning 3 replies 362 views

Richard27229

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.

Albermarle

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

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 

dunstonh

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).