Nest Pension advise for a carer.

garyb67

Can anyone advise about how you would calculate the £ figure to pay into a nest pension, to ensure that the threshold is not exceeded when receiving carers allowance. i believe it is 50% but not sure how this is calculated and example would help

Marcon

garyb67 said:

Can anyone advise about how you would calculate the £ figure to pay into a nest pension, to ensure that the threshold is not exceeded when receiving carers allowance. i believe it is 50% but not sure how this is calculated and example would help

Carer's allowance is (potentially) taxable, so counts as 'earned income' for the purposes of making pension contributions.

The maximum you can pay in is 100% gross. That means you could pay a maximum of 80% of the allowance into NEST, who then claim basic rate tax and add it to your pension pot with them.

Not quite sure what sort of example would help - it's just a simple bit of arithmetic - so I wonder if there's something else you are taking into account which might be muddying the waters? You reference to 50% makes me think you have earned income as well. If that's the case, https://www.litrg.org.uk/tax-guides/disabled-people-and-carers/caring-someone/tax-and-benefits-carers (which does have examples) is likely to be very helpful reading.

garyb67

@Marcon thanks for taking the time to reply - can you review the example below and advise if correct 

£8200 an salary 
£7228 carers allow threshold 
£1950 Pension contribution 
£6250 an salary after pension contribution
£975 additional 50% of pension cont added back 
£7225 amount taken into account to keep under the carers allowance threshold

Many thanks