Topping Up Workplace Pension

AlanP_2

LeafGreen said:

MallyGirl said:

LeafGreen said:

Thankyou both, I will do some reading up on the separate pension/SIPP options although ideally I’d like to keep things in one place (and I think the fees on my work pension are quite low) it’s sounds like it’s definitely worth looking into.
My work scheme is salary sacrifice and I have already been ramping up my ongoing contributions (now 40% employee+15% employer) as another way to redress my balance of cash vs investments - there would not be any employer matching on lump sum contributions.

From reading your replies, I think I have perhaps been getting slightly ahead of myself in that I now think I wouldn’t be able to pay in the full £90K - just up to 80% of that amount.

I also started getting a bit confused thinking about whether I need to take the personal allowance into account, because on that part of my earnings, I haven’t paid any tax on to begin with.

Anyway, thanks for your time in replying.

In your opening post you said that your salary was less than £60k?
if so then that is your limit of gross (including tax relief) contributions. Previous years allowances only come into play if you earn more than £60k

Thanks for this, I have perhaps been barking up the wrong tree and this bright idea might be a non-starter - my base pensionable salary is well under £60K!

To clarify another point that someone mentioned, the 55% contribution is 40% me and 15% employer.  I think I can increase my 40% a little further and stay above NMW, which is what I will do.
 

If you are making a personal / employee contribution then it isn't a salary sacrifice scheme and therefore the NMW limitations doesn't apply.

It  is relevant for a SS scheme as the employer is legally obliged to pay you that NMW. If it's your contributions you can go as low as you want to.

You'll be better informed and will be able to make better decisions if you work out how you'd work pension operates.

At the end of the day everybody gets the same tax relief one way or another but the route and optimisation options differ between methods.