Opt Out 2nd Pension

leicsmarkyr

If you opt out the second pension, when does this amount go into your pension fund and how much is it worth annually (or does it differ)?

CLAPTON

If you are opted out due to a company pension then no the money doesn't go into your pension but you pay a lower rate of NI contributions i.e 9.4% rather than 11%

leicsmarkyr

CLAPTON wrote: »

If you are opted out due to a company pension then no the money doesn't go into your pension but you pay a lower rate of NI contributions i.e 9.4% rather than 11%

Yes I took a salary scarifice and opted out of the 2nd pension. How can I tell if my NI is at 9.4% rather than 11%

CLAPTON

take gross monthly salary
less pension contributions
giving taxable income
subtract 453 lower NI limit
then mutiply by 9.4% ... that should be your NI contribution approximately (assuming you are not a 40% tax payer

sya220

It has never occurred to me to check what kind of NI contribution I have been paying. By chance I checked my payslip today and spotted that my NI code is D. Is it a contracted-out one? I certainly cannot remember that was my choice. Am I paying lower rate? Does that mean I do not get full pension when I retire (which is in 4 years time).? Is that anything I can do to pay up? Please advise. Thank you.

CLAPTON

sya220 wrote: »

It has never occurred to me to check what kind of NI contribution I have been paying. By chance I checked my payslip today and spotted that my NI code is D. Is it a contracted-out one? I certainly cannot remember that was my choice. Am I paying lower rate? Does that mean I do not get full pension when I retire (which is in 4 years time).? Is that anything I can do to pay up? Please advise. Thank you.

do you have an occupational pension?

leicsmarkyr

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CLAPTON wrote: »

take gross monthly salary
less pension contributions
giving taxable income
subtract 453 lower NI limit
then mutiply by 9.4% ... that should be your NI contribution approximately (assuming you are not a 40% tax payer

Checking this month payslip (get paid MOnday), I am paying 11% still on my NI. My company started a new pension scheme in Jan 2008 which I joined and pay the pension costs via salary scarifice. I said I would also do opt out.

When does opt out start usually? esp since the scheme started towards the end of the tax year

CLAPTON

ah you didn't say salary sacrifice...I'm not sure how that works I'm afraid.

leicsmarkyr

CLAPTON wrote: »

ah you didn't say salary sacrifice...I'm not sure how that works I'm afraid.

I did say that in one of my posts but not too worry :j


Would expect it to be the same but maybe I am wrong? Possibly a question to HR!

CLAPTON

leicsmarkyr wrote: »

I did say that in one of my posts but not too worry :j


Would expect it to be the same but maybe I am wrong? Possibly a question to HR!

apologies, you are of course correct... but I don't know whether salary sacrifice affect things or not.

The basics of 'opting' out is that you have opted out of the state second pension so you would expect to pay less as you get less (the logic being you don't need it because you have an occupational pension which will pay more than the 2nd state pension)

leicsmarkyr

It might be because its classed as a personal pension scheme and me and employer paid into it. Looks like I get a fee put into the scheme at some point.

I have emailed the financial adviser that the company employed to ask and see what he says