pension contributions refund advice

Jo1923

Just looking for some advice , nhs pension contributions, i have paid the wrong amount and my contributions have been adjusted to 10.5 not 12 percent , the refund of these contributions will they form my taxable pay for that month ?

thanks in advance

dunstonh

The refund should be taxed and subject to NI. Effectively, it is increasing your gross pay for that period.

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81935468#Comment_81935468

The refund will have tax deducted to reflect the fact that it was (wrongly) given tax relief because it had been treated as a pension contribution. OP will already have paid NI on it, so no further NI is due (the NHS scheme isn't salary sacrifice).

DRS1

I think there may be some confusion. The OP mentions a refund of contributions which would come from the scheme (which is what @Marcon is talking about) but they also say the contribution rate has been reduced from 12% to 10.5% which would mean they have more (taxable and NICable) money in their pay packet (which is what @dunstonh is talking about).

Marcon

https://forums.moneysavingexpert.com/discussion/comment/81935644#Comment_81935644

There's no confusion. OP has specifically referred to a refund and asked how the refund would be treated.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81935664#Comment_81935664

So how do you explain the adjustment from 12% to 10.5%?

Nebulous2

https://forums.moneysavingexpert.com/discussion/comment/81935682#Comment_81935682

Public sector pension payments - NHS for example - can be based on a percentage of salary, with higher earners paying more. If the person has been allocated to the wrong payband they will have overpaid, and will be entitled to a refund.