Can I put all my income into a pension?

I’m working on a PAYE job and wanting to build up some pension after being a Carer. I’m mid thirties and haven’t paid into a pension for 13 years. I don’t need to spend to much every year as I don’t have friends, have a house fully paid and inheritance.

My company will top 7% of whatever I put in over 5%.

Thoughts? I heard you can’t put below min wage?
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  • tigerspill
    tigerspill Posts: 764
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    You cant go below minimum wage.
    This happened to me last month and my company reduced the payment to comply.
  • Dox
    Dox Posts: 3,116
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    edited 15 August 2018 at 6:10PM
    tigerspill wrote: »
    You cant go below minimum wage.
    This happened to me last month and my company reduced the payment to comply.
    That only applies if you are contributing via salary sacrifice.

    Otherwise you can (usually) pay in up to the lower of your earnings or £40,000 a year including tax relief/any employer contributions. If you exceed these limits, you won't get tax relief on the excess.
  • What is salary sacrifice?
  • zagfles
    zagfles Posts: 20,279
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    How does you works pension work? There are 3 ways.

    As mentioned above, if it's sac sal you can't go below the minimum wage (about £16k if full time). But you might be able to use AVCs or make payments to another pension arrangement eg a SIPP or personal pension.

    If it uses "net pay", this is where conts are deducted before tax but after NI, ie you get tax relief but not NI relief in your payslip, then you could theoretically contribute 100% of your earnings into the pension but you'd probably end up paying them (as NI needs to be taken from somewhere). Also it's generally a bad idea as you wouldn't get tax relief on the amount within your personal allowance. So you'd be better using a private pension for the amount within the personal allowance, once you've got the max employer cont possible.

    If it's a RAS scheme, where conts are taken after tax and NI and basic rate relief is added by the pension scheme, then you could put in 100% and you would get tax relief on the lot.
  • zagfles
    zagfles Posts: 20,279
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    Dox wrote: »
    That only applies if you are contributing via salary sacrifice.

    Otherwise you can (usually) pay in up to the lower of your earnings or £40,000 a year including tax relief/any employer contributions. If you exceed these limits, you won't get tax relief on the excess.
    AAARRGGGHH!! The earned income limit does not include employer contributions. The £40k annual allowance does. The annual allowance can be carried forwards from previous years, the earned income limit can't. They are separate limits with separate rules and trying to combine them into one causes confusion.
  • Paul_Herring
    Paul_Herring Posts: 7,481
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    I heard you can!!!8217;t put below min wage?

    You are only allowed to salary sacrifice your gross wage down to the minimum wage.

    If you want to add to a pension anything below that limit (and get the 20% rebate, even on money that didn't actually get tax due to being within your allowance*) then you have contribute it after it's been through the tax calculation on your payslip.

    Your employer may allow you do contribute that way, otherwise you will have to 'open another pension' somewhere else to deposit it into.




    * This is akin to the £3,600 someone who doesn't have any earnings at all can add to a pension fund - they contribute £2,880 and get the rebate to take it up to £3,600.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • tigerspill
    tigerspill Posts: 764
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    Dox wrote: »
    That only applies if you are contributing via salary sacrifice.

    Otherwise you can (usually) pay in up to the lower of your earnings or £40,000 a year including tax relief/any employer contributions. If you exceed these limits, you won't get tax relief on the excess.

    Fair point. Mine is SS.
  • @zagfles sorry I cant quote for some reason. I had the automatic pension, or three options of varying employer/employer contribution. Eg 2% employer and 2% employee, 3% and 5% and lastly 7% and employee puts in whatever they want.
  • kidmugsy
    kidmugsy Posts: 12,709
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    "Can I put all my income into a pension?"

    No: you are limited to your earnings.
    Free the dunston one next time too.
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