Can I pay more into my workplace pension?

xylophone

Also discussed here

https://forums.moneysavingexpert.com/discussion/6390015/40-000-pension-annual-allowance-limit-for-higher-rate-taxpayers/p1

And the Annual Allowance increases in 23/4 to £60,000.

AlanP_2

Is NEST the pension that charges an initial fee on contributions? 1% rings a bell.

If it is, then opening a separate pension with Vanguard or similar would avoid that charge.

Pat38493

To recap, the total amount that can be paid into the pension in the tax year 22/23 is limited by whichever is the lower of:

- Your employment earnings
- £40,000 (soon to increase to 60000)

You need to keep in mind though that both these are the total amount put into all your pensions from all sources - you, employer etc, and also that any money that you pay in from your already taxed income, will be grossed up by 20% (which effectively means it will be divided by 0.8 - put in 8000 and the pension will end up with 10,000)

Further - for the 40K limit, you can also look to see how much you put into the pension in the 3 previous tax years, and you are allowed to roll this over.  So, for example, if you paid zero into the pension in the prior 3 tax years, you could actually pay 160000 in this year (but obviously you would hit the other limit of your employment earnings which doesn't have rollover).

Beyond that, you can also then reclaim any tax you paid on those pension contributions at the higher rates and also you will stop yourself from ending up paying an effective 60% tax rate on income between 100,000 and about 120,000

Albermarle

AlanP_2 said:

Is NEST the pension that charges an initial fee on contributions? 1% rings a bell.

If it is, then opening a separate pension with Vanguard or similar would avoid that charge.

Reading through the thread that crossed my mind as well.

OP - In an ideal world, NEST is not the best pension to make large contributions to. This is because, very unusually, they make an actual charge on contributions of 1.8%, whereas normally there is no charge.
To partly compensate for that their ongoing charge of 0.3% is lower than normal.

On the one hand it is pretty easy to open a new pension ( unless you get asked for ID checks) . On the other hand the priority is to make absolutely sure you get the money in a pension before April 5th ( and preferably not on the last day/hour). Your tax savings will far outweigh the 1.8%.

Pat38493

Example providers where you should be able to set up a SIPP pension account pretty easily and quickly online:

- Vanguard
- Fidelity
- AJ Bell
- Hargreaves Lansdown.
- Aegon
- Aviva

These are just examples there are others - comparisons here

Typically the platform charges are either by a percentage or fixed amount - percentage better for lower amounts fixed for large pots.


Broker comparison: cheap investment platforms UK (monevator.com)

Find the best & cheapest SIPP - Money To The Masses

MallyGirl

if you can open any of the above in the next couple of days, even leaving in cash, then you could transfer in to NEST after that if you wanted. Nest charge 1.8% for contributions but no fees for transfers in. The main thing is to get something done in the last couple of days of the current tax year.

Brie

Not much time left but did you get paid redundancy money?  Was there (& is there still) an option to pay some of that into your work pension?  Otherwise Nest and what others have suggested are good options.

gelato_cat

AlanP_2 said:

Is NEST the pension that charges an initial fee on contributions? 1% rings a bell.

If it is, then opening a separate pension with Vanguard or similar would avoid that charge.

Yes, it's 1.8% 

gelato_cat

Albermarle said:

AlanP_2 said:

Is NEST the pension that charges an initial fee on contributions? 1% rings a bell.

If it is, then opening a separate pension with Vanguard or similar would avoid that charge.

Reading through the thread that crossed my mind as well.

OP - In an ideal world, NEST is not the best pension to make large contributions to. This is because, very unusually, they make an actual charge on contributions of 1.8%, whereas normally there is no charge.
To partly compensate for that their ongoing charge of 0.3% is lower than normal.

On the one hand it is pretty easy to open a new pension ( unless you get asked for ID checks) . On the other hand the priority is to make absolutely sure you get the money in a pension before April 5th ( and preferably not on the last day/hour). Your tax savings will far outweigh the 1.8%.

Thanks, yes, after reading the replies in this thread I looked carefully - they take 1.8% of everything, including the tax relief...  I'm glad you all pointed this out to me so I know to look out for this in the future!

gelato_cat

Pat38493 said:

Example providers where you should be able to set up a SIPP pension account pretty easily and quickly online:

- Vanguard
- Fidelity
- AJ Bell
- Hargreaves Lansdown.
- Aegon
- Aviva

These are just examples there are others - comparisons here

Typically the platform charges are either by a percentage or fixed amount - percentage better for lower amounts fixed for large pots.


Broker comparison: cheap investment platforms UK (monevator.com)

Find the best & cheapest SIPP - Money To The Masses

Thank you!