Did I get it right this time?

owlowlowl

QrizB said:

owlowlowl said:

So do I subtract the tax threshold from THAT sum? £79644- £50,271 = £29,373? So he can pay in £2447 a month?

As we're halfway through the current tax year, you've only got six months left to salary sacrifice another £29373. So you could be sacrificing almost £5k a month (subject to minimum wage and actually being able to live on whatever is left).

Ahhhhhh, GOOD POINT! 

If we pay some of that in from savings as a lump sum, can we claim tax relief back on that? 

Dazed_and_C0nfused

owlowlowl said:

QrizB said:

owlowlowl said:

So do I subtract the tax threshold from THAT sum? £79644- £50,271 = £29,373? So he can pay in £2447 a month?

As we're halfway through the current tax year, you've only got six months left to salary sacrifice another £29373. So you could be sacrificing almost £5k a month (subject to minimum wage and actually being able to live on whatever is left).

Ahhhhhh, GOOD POINT! 

If we pay some of that in from savings as a lump sum, can we claim tax relief back on that? 

Who would you be paying this lump sum to?

QrizB

owlowlowl said:

QrizB said:

owlowlowl said:

So do I subtract the tax threshold from THAT sum? £79644- £50,271 = £29,373? So he can pay in £2447 a month?

As we're halfway through the current tax year, you've only got six months left to salary sacrifice another £29373. So you could be sacrificing almost £5k a month (subject to minimum wage and actually being able to live on whatever is left).

Ahhhhhh, GOOD POINT! 
If we pay some of that in from savings as a lump sum, can we claim tax relief back on that? 

It would make more sense to salary sacrifice into the AVC (saving NI again!) and top up your current account from savings.

QrizB

owlowlowl said:

The question is whether to take the AVCs that make up the DC part and put them in a SIPP instead. Cons: we lose the NI relief (around £1000 pa). Pros: We make a 6% return not a 1% return on the money leaving us hundreds of thousands of pounds wealthier in retirement. 

Your current AVC funds have made 60% total in 7 years. Why are you expecting them to only make 1% pa for the next 13?

Again, projections aren't forecasts.

owlowlowl

QrizB said:

owlowlowl said:

The question is whether to take the AVCs that make up the DC part and put them in a SIPP instead. Cons: we lose the NI relief (around £1000 pa). Pros: We make a 6% return not a 1% return on the money leaving us hundreds of thousands of pounds wealthier in retirement. 

Your current AVC funds have made 60% total in 7 years. Why are you expecting them to only make 1% pa for the next 13?

Again, projections aren't forecasts.

I am going to write that in my notebook and make it my mantra.

I honest to God did not realise that there would be a massive gap between the projection and what was sort of averagely realistic, never mind what was actually good (Ok, Ok, I know now is not really a time to be optimistic about these things with the world really transforming in horrible ways, but let a gal dream!)

owlowlowl

QrizB said:

owlowlowl said:

QrizB said:

owlowlowl said:

So do I subtract the tax threshold from THAT sum? £79644- £50,271 = £29,373? So he can pay in £2447 a month?

As we're halfway through the current tax year, you've only got six months left to salary sacrifice another £29373. So you could be sacrificing almost £5k a month (subject to minimum wage and actually being able to live on whatever is left).

Ahhhhhh, GOOD POINT! 
If we pay some of that in from savings as a lump sum, can we claim tax relief back on that? 

It would make more sense to salary sacrifice into the AVC (saving NI again!) and top up your current account from savings.

Got it. This is a much more sensible way of doing it! Thank you.