Can I put my state pension into my company pension plan?

FlorayG

I'm 66 and still working full-time. I'm a basic rate taxpayer. Now I'm getting over £800 a month state pension which CURRENTLY I don't need, because I'm still working.
Somebody told me I can put some of this into my company pension and get tax relief, which will be better than any other sort of investment interest
I've never taken much notice of my company pension or how it works because the one useful thing I know is that it's worth very little - I haven't been paying in for more than 5 years. Please somebody help and explain things simply for me!

molerat

You can pay up to the total of your earned income, that doesn't include pensions income, into a pension.  So if you pay it into a SIPP that will be 80% of your gross wage as the taxman gives you a 25% top up.  Will you still be able to pay into that old company pension and if so how will it be paid ?

Marcon

FlorayG said:

I'm 66 and still working full-time. I'm a basic rate taxpayer. Now I'm getting over £800 a month state pension which CURRENTLY I don't need, because I'm still working.
Somebody told me I can put some of this into my company pension and get tax relief, which will be better than any other sort of investment interest
I've never taken much notice of my company pension or how it works because the one useful thing I know is that it's worth very little - I haven't been paying in for more than 5 years. Please somebody help and explain things simply for me!

You opted out and missed out on 'free' money from the employer, so joining the scheme now would be no bad idea! 

See if you can pay your personal contributions by salary sacrifice, to give you both tax relief and an NI saving.

FlorayG

More simple than that, please. I don't understand either of those replies. What is salary sacrifice? @molerat sorry I don't understand a word of your response
I don't pay NI any more

Marcon

Not sure it can be made any simpler. What do you not understand about missing out on free money?!

Molerat's answer is a model of clarity - take a deep breath, read it again and you'll realise it tells you all you need to know.

molerat said:

You can pay up to the total of your earned income, that doesn't include pensions income, into a pension.  

Surely that's pretty clear? If not, please say what is confusing you.

molerat said:

So if you pay it into a SIPP that will be 80% of your gross wage as the taxman gives you a 25% top up.  

A SIPP is a self invested personal pension. If you can't pay into your company scheme for some reason, that's a good alternative and you'll get tax relief at basic rate.

molerat said:

Will you still be able to pay into that old company pension and if so how will it be paid ?

Surely that is also clear? If not, please say what is confusing you.


Read the pension literature your company will be able to give you - and ask to be enrolled in the pension scheme so you get the benefit of the employer contribution.

Dazed_and_C0nfused

FlorayG said:

I'm 66 and still working full-time. I'm a basic rate taxpayer. Now I'm getting over £800 a month state pension which CURRENTLY I don't need, because I'm still working.
Somebody told me I can put some of this into my company pension and get tax relief, which will be better than any other sort of investment interest
I've never taken much notice of my company pension or how it works because the one useful thing I know is that it's worth very little - I haven't been paying in for more than 5 years. Please somebody help and explain things simply for me!

Very unusual for someone to voluntarily take an effective pay cut.  And potentially be paying more tax than is necessary for the privilege 😳

You might thinks it's "useful" to know but it's not accurate!

How much you can contribute to a pension is determined by your earnings.  State Pension income isn't counted for this but you can use that money to add to a pension if your earnings are sufficient to allow it.

dunstonh

Somebody told me I can put some of this into my company pension and get tax relief, which will be better than any other sort of investment interest

Yes you can.

I've never taken much notice of my company pension or how it works because the one useful thing I know is that it's worth very little - I haven't been paying in for more than 5 years.

Pensions beat ISAs and cash savings accounts. Partly through tax reliefs and employer contributions.  The latter effectively being free money to you.

The amount in a pension will always be influenced by the amount you pay in.  If you pay in peanuts, then it will always be peanuts.    But what you pay in will do better than if you paying the money into a savings account.

Some of the posters seem to have read your comments to mean you have opted out of the workplace pension.  Is this the case or are you still an active member where the employer and you pay into it each payday?

xylophone

https://forums.moneysavingexpert.com/discussion/comment/80862048/#Comment_80862048
Above dated 29 June.

I've only had a workplace pension for a few years - since it became compulsory - so it's not going to generate any appreciable income when it matured, probably no more than £500 a year on forecast, so I expect to take it as a lump sum. Is it still a good idea in that case? And how much extra should I contribute?

Do you mean that you have worked for this company (which always offered a PS) for many years but declined to join the Scheme before  

automatic enrolment?

You are now a member but only your employer now contributes?

Is this a Defined Benefit Scheme?

You appear to have rental income as well as SP and a salary. From what kind of letting does the income derive?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

FlorayG

I had two company pension schemes, my previous employer was bought out. I cashed in the old one so now I only have the one - ongoing- that started 5 years ago. I'm still paying in to it. Doe that explain things?

Marcon

FlorayG said:

I had two company pension schemes, my previous employer was bought out. I cashed in the old one so now I only have the one - ongoing- that started 5 years ago. I'm still paying in to it. Doe that explain things?

No, it confuses the issue totally given your first post:

FlorayG said:

I've never taken much notice of my company pension or how it works because the one useful thing I know is that it's worth very little - I haven't been paying in for more than 5 years. Please somebody help and explain things simply for me!

Perhaps you could explain things simply for us...?!

FlorayG

 (Removed by Forum Team)

yes, thanks; I can see it wasn't perfectly clear I should have said "I've been paying in for NOT MORE THAN five years"