Maximum contributions on pension

ManCity11

So a think 25396 is minimum wage based on 40 hours
so maximum i can contribute is 6604

Thats way am taking this lol

Dazed_and_C0nfused

ManCity11 said:

So a think 25396 is minimum wage based on 40 hours
so maximum i can contribute is 6604

Thats way am taking this lol

Assuming your figures are correct it's only the maximum using salary sacrifice.

You could still make personal contributions using the relief at source method i.e. you pay £100 and the pension company adds £25 in basic rate tax relief, making a gross contribution of £125.

With salary sacrifice you don't get anything added (as they are actually employer contributions) but you avoid paying both tax and NI on the salary you have given up.

artyboy

Dazed_and_C0nfused said:

ManCity11 said:

So a think 25396 is minimum wage based on 40 hours
so maximum i can contribute is 6604

Thats way am taking this lol

Assuming your figures are correct it's only the maximum using salary sacrifice.

You could still make personal contributions using the relief at source method i.e. you pay £100 and the pension company adds £25 in basic rate tax relief, making a gross contribution of £125.

With salary sacrifice you don't get anything added (as they are actually employer contributions) but you avoid paying both tax and NI on the salary you have given up.

Although if you did that, the question would be, what are you actually going to live on...?

ManCity11

Yeah i only want to do it in a salary sacrifice scheme. Shame i cant do more.

Dazed_and_C0nfused

artyboy said:

Dazed_and_C0nfused said:

ManCity11 said:

So a think 25396 is minimum wage based on 40 hours
so maximum i can contribute is 6604

Thats way am taking this lol

Assuming your figures are correct it's only the maximum using salary sacrifice.

You could still make personal contributions using the relief at source method i.e. you pay £100 and the pension company adds £25 in basic rate tax relief, making a gross contribution of £125.

With salary sacrifice you don't get anything added (as they are actually employer contributions) but you avoid paying both tax and NI on the salary you have given up.

Although if you did that, the question would be, what are you actually going to live on...?

Most people can't but some, particularly as they approach retirement, try and get the absolute maximum amount possible into a pension (that had tax relief or a tax saving like SS).

And they live off savings or spouse/partner income.

Cobbler_tone

artyboy said:

Dazed_and_C0nfused said:

ManCity11 said:

So a think 25396 is minimum wage based on 40 hours
so maximum i can contribute is 6604

Thats way am taking this lol

Assuming your figures are correct it's only the maximum using salary sacrifice.

You could still make personal contributions using the relief at source method i.e. you pay £100 and the pension company adds £25 in basic rate tax relief, making a gross contribution of £125.

With salary sacrifice you don't get anything added (as they are actually employer contributions) but you avoid paying both tax and NI on the salary you have given up.

Although if you did that, the question would be, what are you actually going to live on...?

They have £13k of shift pay too, so not going down to NMW and then necessarily throwing that into a pension too, directly. I.e. they earn £45k.
Like always it comes down to net affordability. I am comfortable on £2k net a month now with 50% contribution but for much of my life I needed over £3k net pay. Plus it is easier to focus on the pension as you get older from a mindset perspective.

ChippyIbe

ManCity11 said:

Thanks for the replies.

so i am  pretty  clueless with this stuff. All a know is i pay 5% and work pay 10%.

Work wont pay more than 10% thats the max.

 Its on a  salary sacrifice scheme. I want to up my contribution to 40% ideally.

Does anyone know what salary is NMW.

So i gave my basic salary of 32k
But i do get 13k shift pay.
But i didnt included as i know my contributions
are based on my basic pay.

With my employer the monthly NMW threshold changes because they count the number of working days in the month and multiply by the daily rate based on my contracted hours.

Fortunately I can change my S/S deduction on-the-fly to match this, and using simple spreadsheet that also takes into account annual bonus etc I can set my NI due to be the minimum possible.