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

Secret2ndAccount

You can increase your pension contributions and it will save you tax. Technically, you can't pay the State Pension into a pension, but you can pay your work earnings into a pension, and live off the State Pension money. The end result is exactly the same. If we are talking about reducing your work income from 25k to 15k and putting the 10k into your work pension, it's simple. You add 10k to your pension, but your take-home only drops 8k because you would have paid 20% tax.
That's the simple case. It can be more complicated: if you put so much into the pension that your salary drops below £12,570, or falls below the minimum hourly wage, then it can be more complicated. If that's the case, get back to us as we will need to talk in more detail about how the contributions get made.
There will be some tax to pay on your pension when you eventually leave work, but it's highly unlikely it will be as much as 20%. So pensions are a pretty good deal for almost everyone who can afford to pay in to them. Some would say you can't afford not to pay into them.

molerat

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?

That could have an effect on how much you can pay into a pension depending on type of pension and precisely what you did with it.

FlorayG

Secret2ndAccount said:

You can increase your pension contributions and it will save you tax. Technically, you can't pay the State Pension into a pension, but you can pay your work earnings into a pension, and live off the State Pension money. The end result is exactly the same. If we are talking about reducing your work income from 25k to 15k and putting the 10k into your work pension, it's simple. You add 10k to your pension, but your take-home only drops 8k because you would have paid 20% tax.
That's the simple case. It can be more complicated: if you put so much into the pension that your salary drops below £12,570, or falls below the minimum hourly wage, then it can be more complicated. If that's the case, get back to us as we will need to talk in more detail about how the contributions get made.
There will be some tax to pay on your pension when you eventually leave work, but it's highly unlikely it will be as much as 20%. So pensions are a pretty good deal for almost everyone who can afford to pay in to them. Some would say you can't afford not to pay into them.

Thank you
yes, I understand that actually I pay in from my salary and make up the shortfall to myself from the state pension. It won't put me in either of the scenarios you mention; so can I just increase my contribution to, say, ten times what it is currently? And then every £8 taken from my salary is actually worth £10 when I cash in? Sorry I'm finding it hard to get my head around the calculations and how it works, I'm completely new to this idea I had no idea you could do it (I've always said they should teach about pensions in school)

alanyau88

I think because you have crystallised one personal pension, you are subject to a maximum of £10,000 contributions a year to your second pension as long as your job is paying you the same or more earned income.

Marcon

FlorayG said:

Secret2ndAccount said:

You can increase your pension contributions and it will save you tax. Technically, you can't pay the State Pension into a pension, but you can pay your work earnings into a pension, and live off the State Pension money. The end result is exactly the same. If we are talking about reducing your work income from 25k to 15k and putting the 10k into your work pension, it's simple. You add 10k to your pension, but your take-home only drops 8k because you would have paid 20% tax.
That's the simple case. It can be more complicated: if you put so much into the pension that your salary drops below £12,570, or falls below the minimum hourly wage, then it can be more complicated. If that's the case, get back to us as we will need to talk in more detail about how the contributions get made.
There will be some tax to pay on your pension when you eventually leave work, but it's highly unlikely it will be as much as 20%. So pensions are a pretty good deal for almost everyone who can afford to pay in to them. Some would say you can't afford not to pay into them.

Thank you
yes, I understand that actually I pay in from my salary and make up the shortfall to myself from the state pension. It won't put me in either of the scenarios you mention; so can I just increase my contribution to, say, ten times what it is currently? And then every £8 taken from my salary is actually worth £10 when I cash in? Sorry I'm finding it hard to get my head around the calculations and how it works, I'm completely new to this idea I had no idea you could do it (I've always said they should teach about pensions in school)

Could you give some actual numbers please, especially for your gross salary? That way you'll get some informed answers, rather than speculative ones which simply drag you deeper (and possibly needlessly so!) into the murky world of pensions, because they are trying to cover different bases which might or might not apply to you. There are no prizes for being more confused than you need to be!

xylophone

I cashed in the old one 

Exactly what kind of pension was this and what do you mean by "cashing in"?

Does your rental income arise from anything other than a  property which you let out as a family home?

Your employer offers a DC pension? Who is the provider/administrator?

What is your gross salary?

How much do you contribute to your pension each month?