Tax Relief Payments - Workplace Pension

bilko89

penners324 said:

lisyloo said:

It sounds like thsi is under the NEST scheme which is the legal minimum

"Qualifying earnings are a range – for the 2024/25 tax year, this is gross earnings between £6,240 and £50,270. You use a worker’s earnings between this range as a basis for calculating contributions."

Nest isn't just the minimum. You can do salary sacrifice through them as well.

Plenty of other schemes also allow contributions based on qualifying earnings 

Yh this is an Aegon scheme I'm currently in

lisyloo

If the charges are low (I'm pretty sure they are capped in these schemes) and the investment choices meet your needs then you could simply put more into this scheme.
The pension is merely a wrapper for tax purposes. You will be invested in funds which are the underlying investments.

If the choice of funds is limited and you want a wider choice then you could get your own SIPP.
Again the SIPP is just a tax efficient wrapper. It could have hundreds of investment choices.

Albermarle

 I'm new to trying to understand my pension, which at 35, I'm ashamed to say!

I would not be ashamed, there are many people at 65 still with their head in the sand about pensions.

It is difficult to give an exact figure, but it is clear that the legal minimum contributions are not enough.
So as soon as you can afford it, you should increase your contribution, or get a job with a more generous employer. Some companies will pay up to 10% in your pension, although these tend to be large companies.

bilko89

Albermarle said:

 I'm new to trying to understand my pension, which at 35, I'm ashamed to say!

**I would not be ashamed, there are many people at 65 still with their head in the sand about pensions.**

It is difficult to give an exact figure, but it is clear that the legal minimum contributions are not enough.
So as soon as you can afford it, you should increase your contribution, or get a job with a more generous employer. Some companies will pay up to 10% in your pension, although these tend to be large companies.

That gives me some peace of mind thanks. That statement would have passed over my head before but given my learning and planning the last couple of weeks, the thought of being 65 and at this stage scares the life out of me!

I've messed up financially up until now for various reasons but now finally paying for yesterday, enjoying today and planning for tomorrow. A great feeling of relief knowing that as long as I keep my head screwed on and follow my plan, life will be good for me and my family, especially my 2 daughters

Oppenheimer

bilko89 said:

Thanks @lisyloo should have realised that....

I don't think so, my salary is £35K per year/£2916.67 per month. my contribution plus tax relief would be £145.83. Currently my pension contribution is shown on my payslip @ £95.87 per month (plus tax relief which I found the figure for on pension website).

The figures just don't seem to add up for me. It may be because I live in Scotland and the tax deductions are a bit more complicated up here.

I have the same level of salary and if you think that your salary will remain around this amount throughout your working life (which is totally fine) I would consider looking for a job in the public sector and a Defined Benefit pension structure.  You will then have pretty good job security and a guaranteed pension later in life that will take care of any financial concerns.  Sadly only those with high salaries, bonuses and generous employer contributions will benefit from Defined Contribution schemes.  You have time on your side to still make adequate provision - just get in the right employer!

My last employer closed the Defined Benefit scheme and I resigned the next day.  I am now in the public sector and couldn’t be happier.

bilko89

Oppenheimer said:

bilko89 said:

Thanks @lisyloo should have realised that....

I don't think so, my salary is £35K per year/£2916.67 per month. my contribution plus tax relief would be £145.83. Currently my pension contribution is shown on my payslip @ £95.87 per month (plus tax relief which I found the figure for on pension website).

The figures just don't seem to add up for me. It may be because I live in Scotland and the tax deductions are a bit more complicated up here.

I have the same level of salary and if you think that your salary will remain around this amount throughout your working life (which is totally fine) I would consider looking for a job in the public sector and a Defined Benefit pension structure.  You will then have pretty good job security and a guaranteed pension later in life that will take care of any financial concerns.  Sadly only those with high salaries, bonuses and generous employer contributions will benefit from Defined Contribution schemes.  You have time on your side to still make adequate provision - just get in the right employer!

My last employer closed the Defined Benefit scheme and I resigned the next day.  I am now in the public sector and couldn’t be happier.

Thanks for your reply!

At the moment, I have too much going on personally to uproot myself but it's definitely something I would give serious thought to in the next year or so. Seeing your reply has urged me to send that email to the FD to find out if 3% is the maximum they will go if I raised my contributions.