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  • FIRST POST
    • MSE Guy
    • By MSE Guy 9th Oct 12, 8:34 PM
    • 1,628Posts
    • 1,255Thanks
    MSE Guy
    Pension need to knows Official MSE Guide Discussion
    • #1
    • 9th Oct 12, 8:34 PM
    Pension need to knows Official MSE Guide Discussion 9th Oct 12 at 8:34 PM


    This discussion's specifically to discuss the new MSE Pension Need to Knows Guide.

    Click Reply below to discuss it
    Last edited by MSE Andrea; 22-10-2012 at 10:24 AM.
Page 8
    • jonon
    • By jonon 11th Aug 17, 9:46 AM
    • 15 Posts
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    jonon
    If you're employed do so save on no NI contribution on your pension payments?


    I'm trying to work out how a Pension is better than a Lisa? If the final pot of a LISA is tax free, but the final pot of a Pension is taxable.
    Last edited by jonon; 11-08-2017 at 9:50 AM.
    • MallyGirl
    • By MallyGirl 11th Aug 17, 10:00 AM
    • 2,673 Posts
    • 7,673 Thanks
    MallyGirl
    if your employer offers salary sacrifice as a way of contributing to your pension then you benefit from the reduction in NI.
    • jonon
    • By jonon 11th Aug 17, 10:02 AM
    • 15 Posts
    • 0 Thanks
    jonon
    Is there any way as self employed to get a reduction in NI with your pension?
    • dunstonh
    • By dunstonh 11th Aug 17, 10:07 AM
    • 92,547 Posts
    • 59,834 Thanks
    dunstonh
    So if you contribute 800 the government add 25%?
    Originally posted by jonon
    20% tax relief does effectively mean it is 25% when you describe it that way. However, it is a tax relief. Not a bonus. So, it should be referred to as gross.
    If you're employed do so save on no NI contribution on your pension payments?
    Depends on how you make the contributions. An employer may offer salary sacrifice and this can lower then NI. If the employer does not offer this, then it will not. Personal contributions won't reduce NI either.

    Is there any way as self employed to get a reduction in NI with your pension?
    yes.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • jonon
    • By jonon 11th Aug 17, 10:11 AM
    • 15 Posts
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    jonon
    How do your pension contributions reduce your NI if self-employed?
    • dunstonh
    • By dunstonh 11th Aug 17, 10:40 AM
    • 92,547 Posts
    • 59,834 Thanks
    dunstonh
    How do your pension contributions reduce your NI if self-employed?
    Originally posted by jonon
    It is done via the tax return. Effectively, you have a lower income because of the pension contribution.

    Much the same way that pension contributions can increase tax credit s and return child benefit for those earning over 50k a year.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • greenglide
    • By greenglide 11th Aug 17, 12:06 PM
    • 3,096 Posts
    • 2,015 Thanks
    greenglide
    Is there any way as self employed to get a reduction in NI with your pension?
    You can always stop being self employed and set up a limited company instead.

    There are pros and cons to this.
    • andy5241
    • By andy5241 6th Dec 17, 1:35 PM
    • 43 Posts
    • 5 Thanks
    andy5241
    Hi I'm 62 and looking to retire shortly, I currently have around 150,000 in a defined contributions plan held with Zurich, but they're now in the process of changing everyone over to a Corporate Savings Platform so I have 2 plans running at the moment. Then by the end of next year the DC will be closed and moved to the CSP. Question is: should I take the benefits from the DC before the end of next year and if I did where's best to get information on Drawdown Providers.
    • dunstonh
    • By dunstonh 6th Dec 17, 2:19 PM
    • 92,547 Posts
    • 59,834 Thanks
    dunstonh
    Hi I'm 62 and looking to retire shortly, I currently have around 150,000 in a defined contributions plan held with Zurich, but they're now in the process of changing everyone over to a Corporate Savings Platform so I have 2 plans running at the moment. Then by the end of next year the DC will be closed and moved to the CSP. Question is: should I take the benefits from the DC before the end of next year and if I did where's best to get information on Drawdown Providers.
    Originally posted by andy5241
    Insufficient information to answer that. There are multiple ways of doing things and the best way is the one that fits your circumstances, tax position and objectives. None of which we know.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • delves60
    • By delves60 24th Jan 18, 11:30 AM
    • 3 Posts
    • 1 Thanks
    delves60
    hi i am 57 years old i have a pension and i wanted to take some money out now but my pension people said i had to have a pension of 50,000 if i wanted to take money out now . My pension is 17,000 on a g.m.p is this right what thay said or is it how thay work thanks
    • Silvertabby
    • By Silvertabby 24th Jan 18, 11:33 AM
    • 2,713 Posts
    • 3,874 Thanks
    Silvertabby
    hi i am 57 years old i have a pension and i wanted to take some money out now but my pension people said i had to have a pension of 50,000 if i wanted to take money out now . My pension is 17,000 on a g.m.p is this right what thay said or is it how thay work thanks
    Originally posted by delves60
    If your pension is mostly GMP (the amount the pension fund has to pay you) then they can withold payment until you reach GMP age. That's currently still 65 for a man and 60 for a woman.

    I assume that 17K is the value of your 'pot', and not your annual pension?
    Last edited by Silvertabby; 24-01-2018 at 11:36 AM.
    • dunstonh
    • By dunstonh 24th Jan 18, 11:56 AM
    • 92,547 Posts
    • 59,834 Thanks
    dunstonh
    hi i am 57 years old i have a pension and i wanted to take some money out now but my pension people said i had to have a pension of 50,000 if i wanted to take money out now . My pension is 17,000 on a g.m.p is this right what thay said or is it how thay work thanks
    Originally posted by delves60
    If they say that is the limitation of their plan then there is no reason to disbelieve them.

    However, it doesnt mean it is a limitation on other plans. If you went to Currys to buy a television, they dont just sell one television. They sell dozens of them with different features and options. Some support the most recent advancements. Others are quite basic. Pensions are just the same. You get advanced ones, basic ones and older ones that cant meet modern requirements.

    As you have safeguard benefits on a plan that is valued over 30,000 you will need to seek advice before you can do what you want to do. You may find the advice is not to do what you want.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • delves60
    • By delves60 24th Jan 18, 12:22 PM
    • 3 Posts
    • 1 Thanks
    delves60
    pension
    hi yes that is my pot i wanted to drawn 25% money out yes it is GMP thanks foer your help
    • delves60
    • By delves60 24th Jan 18, 12:26 PM
    • 3 Posts
    • 1 Thanks
    delves60
    pension
    hi thanks i do belive them just wanted to find out if i could any thing else or if anyone else new of other ways to draw money out thanks
    • Silvertabby
    • By Silvertabby 24th Jan 18, 12:47 PM
    • 2,713 Posts
    • 3,874 Thanks
    Silvertabby
    hi thanks i do belive them just wanted to find out if i could any thing else or if anyone else new of other ways to draw money out thanks
    Originally posted by delves60
    You could ask your pension provider for a CETV (cash equivalent transfer value) with a view to transferring to a new pension scheme - but I think you may struggle to find an IFA willing to recommend that you give up your current benefits if they have valuable protections,
    Last edited by Silvertabby; 24-01-2018 at 1:05 PM.
    • familyguy321
    • By familyguy321 30th Apr 18, 3:16 PM
    • 68 Posts
    • 13 Thanks
    familyguy321
    Hi,

    I will soon be starting a part-time role in the NHS for 6 months. According to the table on this page, I will be contributing 5% as I fall within Tier 1.

    I'm thinking of opting out as I've not had a pension before and I am in my late 20s, so there is no point in starting now.

    Any advice would be appreciated.

    FG
    • AnotherJoe
    • By AnotherJoe 30th Apr 18, 3:25 PM
    • 9,361 Posts
    • 10,312 Thanks
    AnotherJoe
    Hi,

    I will soon be starting a part-time role in the NHS for 6 months. According to the table on this page, I will be contributing 5% as I fall within Tier 1.

    I'm thinking of opting out as I've not had a pension before and I am in my late 20s, so there is no point in starting now.

    Any advice would be appreciated.

    FG
    Originally posted by familyguy321
    I'm sorry what is your reasoning that because you are in your late 20's there is "no point starting now"? Do you mean you are too old? Too young?
    • familyguy321
    • By familyguy321 30th Apr 18, 3:49 PM
    • 68 Posts
    • 13 Thanks
    familyguy321
    I'm sorry what is your reasoning that because you are in your late 20's there is "no point starting now"? Do you mean you are too old? Too young?
    Originally posted by AnotherJoe
    Apologies for not being clear. I meant too old to start now.

    My understanding from the MSE article is that I would need to contribute significantly more than 5% to make up for the years I have not been working.

    FG
    • Aegis
    • By Aegis 30th Apr 18, 3:54 PM
    • 4,889 Posts
    • 3,097 Thanks
    Aegis
    Apologies for not being clear. I meant too old to start now.

    My understanding from the MSE article is that I would need to contribute significantly more than 5% to make up for the years I have not been working.

    FG
    Originally posted by familyguy321
    You're definitely not too old, and you will be losing out on this bit of the contribution if you opt out:

    The employer contribution rate for 2016/17 to 2018/19 is 14.3 per cent of pensionable pay for both the 1995-2008 Scheme and the 2015 Scheme.
    However, the Department of Health announced in March 2017 that they will introduce a levy on employers to pay for the administration of the NHS Pension Scheme. This levy is 0.08 per cent of pensionable pay and will be collected at the same time and in the same way as normal employer contributions. In practical terms, this means employers will pay 14.38 per cent of pensionable pay.
    I am an Independent Financial Adviser
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
    • HappyHarry
    • By HappyHarry 30th Apr 18, 3:58 PM
    • 595 Posts
    • 870 Thanks
    HappyHarry
    Hi,

    I will soon be starting a part-time role in the NHS for 6 months. According to the table on this page, I will be contributing 5% as I fall within Tier 1.

    I'm thinking of opting out as I've not had a pension before and I am in my late 20s, so there is no point in starting now.

    Any advice would be appreciated.

    FG
    Originally posted by familyguy321
    You would be foolish to opt out.

    Your employer is also contributing, significantly more than you are.

    You say you haven't had a pension before, but last May you said you were contributing to your company pension scheme. Many small pensions built up whilst working can be just as good in retirement as one large pension.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
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