Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • richay
    • By richay 13th Jul 17, 12:57 PM
    • 7Posts
    • 0Thanks
    richay
    Tax Allowance & Pension Contribution?
    • #1
    • 13th Jul 17, 12:57 PM
    Tax Allowance & Pension Contribution? 13th Jul 17 at 12:57 PM
    For a few years ive been earning less than personal tax allowance BUT I contribute a considerable amount to works pension monthly. Because i dont pay tax (because of the allowance), friend says cant get any back from tax office for my contributions!. Is this sad but true?
Page 1
    • Caz3121
    • By Caz3121 13th Jul 17, 1:34 PM
    • 11,185 Posts
    • 7,340 Thanks
    Caz3121
    • #2
    • 13th Jul 17, 1:34 PM
    • #2
    • 13th Jul 17, 1:34 PM
    It depends on the type of pension
    If you use google there are a number of articles such as this one
    http://www.thisismoney.co.uk/money/pensions/article-3990296/I-don-t-pay-tax-pension-tax-relief-Steve-Webb-replies.html
    • xylophone
    • By xylophone 13th Jul 17, 8:42 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #3
    • 13th Jul 17, 8:42 PM
    • #3
    • 13th Jul 17, 8:42 PM
    Is your pension contribution taken on a net pay or relief at source basis?

    If relief at source, you will be receiving tax relief even though you do not pay tax.

    If net pay, then you won't.

    See https://www.nowpensions.com/help-centre/faqs/general-information/whats-the-difference-between-net-pay-and-relief-at-source

    http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0491
    • Dazed and confused
    • By Dazed and confused 13th Jul 17, 9:45 PM
    • 2,558 Posts
    • 1,228 Thanks
    Dazed and confused
    • #4
    • 13th Jul 17, 9:45 PM
    • #4
    • 13th Jul 17, 9:45 PM
    It is actually possible you are getting tax relief even with a net pay scheme. For example if salary this year was 12500 and no pension paid the PAYE tax due on the emergency tax code would be 200.

    But if you paid 10% pension your taxable salary would be 11,250 and no tax would be paid. So a tax saving of 200.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,614Posts Today

8,452Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin