Partner’s pension - better to Sal Sac & open another private pension?

What_time_is_it

My partner is in the process of moving some of her savings (from a recent inheritance) into her pensions. She wants to max out the amount that she contributes into her pensions and maximise the tax efficiencies

The current situation is:
Work pension 1 - DB scheme. No options other than a straight in or out. So she is in. Employers also contributes. Sal sac. Tax and NI efficient.
Work pension 2 - Her work allows AVCs into a different pension scheme. This is a DC pension run by Prudential. She can either salary sacrifice down to minimum wage OR make her contributions after tax and NI (i.e. not sal sac) down to zero salary. She is currently doing the latter - leaving  about £100-£200 net each month after contributions, but not getting the NI and tax reductions in her salary.

My question is whether this is the best way of doing it? Would she be better Sal saccing down to minimum wage, and then setting up a (third) pension privately and paying into this as well? 

Like so say, the aim is to maximise pension contributions, thereby effectively moving money from savings into pensions, and to maximise the tax efficiency. Not sure how fees and charges would affect things either.

Any advice or experience on this situation would be gratefully received.

Thanks.

AlanP_2

It doesn't sound like the best way to me. SS down to NMW and then put anything on top in to a separate RAS scheme to get tax relief on "income" that hasn't even been taxed!

MX5huggy

Get on the SS she’s leaving 8% NI  on the table.

The exact amount she can contribute in total to all pensions could be complicated because of the DB pension using up her AA via the Pension Input Amount not simple how much has been contributed. 

Dazed_and_C0nfused

Work pension 1 - DB scheme. No options other than a straight in or out. So she is in. Employers also contributes. Sal sac. Tax and NI efficient

Are you certain of that.  It could be correct but I think salary sacrifice for a DB scheme is unusual.  And what an employer contributes (their normal contributions) is of no relevance whatsoever really as the pension is based on the scheme rules, it's not a pot of money.

What_time_is_it

Thanks for the answers.

i should add that her salary is around £28k a year so it is not a massive difference either way. But it does sound like taking the Sal sac option and opening another pension pot might be the best way. Even with potentially higher fees.

Her DB scheme is definitely Sal sac and takes both tax and NI into account. The same would be the case with her workplace DC Prudential scheme if she took up that option down to NMW level.

Marcon

Dazed_and_C0nfused said:

Work pension 1 - DB scheme. No options other than a straight in or out. So she is in. Employers also contributes. Sal sac. Tax and NI efficient

Are you certain of that.  It could be correct but I think salary sacrifice for a DB scheme is unusual.  And what an employer contributes (their normal contributions) is of no relevance whatsoever really as the pension is based on the scheme rules, it's not a pot of money.

It's unusual because there are so few DB schemes still open to accrual, especially in the private sector - and there are constraints on what public sector DB schemes allow - but where it's possible, the NI saving for both employer and employee makes it attractive for both parties.