Pension carry forward

DRS1

The OP has a SIPP. Presumably that is getting contributions from somewhere? The employer? The OP as personal contributions based on her PAYE income? Or the company(ies) of which she is a (shareholder) director?

If the company(ies) make some money then instead of paying her a dividend they could perhaps contribute that money to the SIPP? That contribution would not be restricted by her PAYE earnings (more by the pre-contribution profits of the relevant company)

af1963

Although you can't make pension contributions for previous years, and "carry forward" won't apply, you can make full use of pension contributions for this and subsequent years, probably worthwhile unless you think you'll need to spend the inheritance money before you get to the age you can take the pension.

Pay anything up to (gross) the full amount of salary into SIPP ( ie pay in 80% of the £27.5k salary = £22k and get it grossed up with a "free" £5.5k) each year. Partially tax free when you come to withdraw it, so it becomes about £23.4k. You can do this each year you remain employed.

QrizB

As well as making personal contributions to a SIPP, up to £27500 gross PA, is there any way that one or both of the companies that you're a director of could make pension contributions on your behalf? This would probably be instead of dividends, unless the company is flush with cash?

Ladyjane26

https://forums.moneysavingexpert.com/discussion/comment/81864916#Comment_81864916

no neither of them would be a consideration.

Ladyjane26

https://forums.moneysavingexpert.com/discussion/comment/81864876#Comment_81864876

I haven’t contributed for many years. The SIPP is made up of a few pensions which I transferred over to HL to combine them together

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81864982#Comment_81864982

That's a shame as if the Ltd Cos could reward you as Director with "employer" pension contributions rather than dividends those contributions would not be constrained by your earned income but only by the Annual Allowance (£60k) plus any available carry forward. It would be tax efficient.

(Total of gross contributions from all sources is counted against the Annual Allowance plus carry forward.)

You could then supplement your income for living expenses from the inheritance to replace the dividends that are not now received. Essentially, making use of the fact that all money is fungible.

I would also say you should push for the employer to meet their obligations with a work place pension scheme, but you seem to have your own firm reasons for not doing so.

Brie

join the work scheme!!! now!!!

you might think it's only for a few years but go for it. I joined a new employer at 64, being very part time but still joined their scheme. After 3 years I left and got a couple thousand back including the employers contributions. It's worth it!!! With your salary you're likely to accrue maybe £10k or more. It's a nice bit to have.

QrizB

join the work scheme!!! now!!!

@Brie the problem is that work hasn't got a scheme, so the OP can't join it.

Not having a scheme is unlawful, but OP doesn't want to rock the boat with their boss (who sounds an unpleasant piece of work).

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81865460#Comment_81865460

In fairness to the employer, it's hard to draw any conclusions about them. OP is anxious not to rock the boat, and that's not an unexpected stance to take. Having an annual salary of £27,500 (especially when you are aged 60 and finding another job is likely to be difficult in the extreme) beats having a discussion with your employer about an annual pension contribution of £637.80 (3% of 'qualifying earnings'), if that discussion could prove terminal to your employment. 3% of £0 = …..

There are still plenty of micro employers out there who fondly believe that auto-enrolment doesn't apply to them because their business is 'too small'. Employees are either not sufficiently clued up to quibble, or like OP, fear for their jobs if they do anything which might jeopardise their employment.

Worth bearing in mind though that when OP finally leaves their job, they can of course complain about not being auto-enrolled and should get at least 3 years of contributions from their (now former) employer: https://www.thepensionsregulator.gov.uk/en/business-advisers/automatic-enrolment-guide-for-business-advisers/what-happens-if-my-client-doesnt-comply-or-is-late-complying

dunstonh

It would be interesting to know what the employer is telling The Pensions Regulator in their return to them that tells the TPR who the pension provider is the number of employees that are in the scheme etc.

Plus, each time the auto-opt in anniversary arrives, what is being done then?