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    • clifford_the_dog
    • By clifford_the_dog 9th Jan 18, 5:57 PM
    • 2Posts
    • 0Thanks
    clifford_the_dog
    Pension strategy for higher earners
    • #1
    • 9th Jan 18, 5:57 PM
    Pension strategy for higher earners 9th Jan 18 at 5:57 PM
    Hi
    I'm curious how other people are approaching their pension saving strategy since the annual tax relief limit on annual contributions tapered down to 10,000 for higher earners making over about 200k.
    In doing my tax return it has dawned on me that I have inadvertently created a tax bill for myself in making contributions via salary sacrifice that take me way over the 10k limit and it crosses my mind that perhaps from now I on I should just make the minimum employee contribution into my company scheme (3%) instead of 10% and let the company I work for continue to contribute their 7%.
    I am 48 and my pension pot is worth about 650K. I figure that with the right investment strategy this could get up to the 1M limit over the next 12 years anyway (I'd like to have the option to retire when I'm 60).
    Used to have an IFA but he decided to be a teacher, I probably need to find a new one........
Page 2
    • colesy
    • By colesy 10th Jan 18, 8:00 PM
    • 58 Posts
    • 35 Thanks
    colesy
    This is not to argue jst personal though I fail to see the benefit of putting it on ISA, as the money used to subscribe to ISA is already taxed at higher rate at source.

    In the meanwhile the OP is already 48yo so within seven years he could get access to some of his pension. Is it not better to put it on SIIP. COuld anyone who know cous shed the light how ISA here will be a better option then SIPP ??
    Originally posted by adindas
    The OP is already overfunding his pension so putting it in a SIPP is not an option. ISA contributions are made with tax paid cash for sure, but all growth is income tax free and CGT free.
    • kidmugsy
    • By kidmugsy 10th Jan 18, 8:48 PM
    • 10,866 Posts
    • 7,431 Thanks
    kidmugsy
    If she is not earning she is limited a maximum 3600 gross annual pension contribution. There is nothing to stop you gifting any amount of money to her but bear in mind IHT liability if you die within 7 years. However she cannot pay more than 3600 or her earned income, whichever is greater, into a pension
    Originally posted by TcpnT
    He can gift her 3k p.a. free of fear of IHT, and that's just slightly more than she needs to contribute 3600 gross. More likely he's gifting her other money too but if it's regular gifts from surplus income that's also free of IHT. At least it is at the moment.

    If my OH is not working, presumably I can put the full amount into her allowance?

    Just a risk as we aren't married.
    Originally posted by Jaguar Skills
    I smile at the notion that it wouldn't be a risk if you were married.
    Free the dunston one next time too.
    • Snakey
    • By Snakey 10th Jan 18, 9:04 PM
    • 1,064 Posts
    • 1,282 Thanks
    Snakey
    Clifford, do you have any unused annual allowance from earlier years?

    I had to stop contributions in early 2016 due to potential LTA issues, my employer lets me have "their" 3% as extra salary so it could be worse. Definitely worth asking.

    Pension tax rule changes suck big time - how can you plan for the long term when they keep moving the goalposts? - and the LTA feels particularly unfair since future changes that you can't predict might retrospectively render today's sensible planning sub-optimal, to say the least.

    But you can only work with what you know today, and right now breaching the AA and potentially the LTA both at once makes pension contributions a terrible idea.

    Unless you cannot get that 7% out of your employer any other way, in which case at least you get a small percentage of something rather than a larger percentage of nothing - although you'll need to factor your own 3% in to that calculation, if that's a requirement to get the 7%.
    • Jaguar Skills
    • By Jaguar Skills 10th Jan 18, 9:17 PM
    • 398 Posts
    • 58 Thanks
    Jaguar Skills
    I will start a new thread tomorrow as I!!!8217;ve hijacked this enough.
    • gadgetmind
    • By gadgetmind 10th Jan 18, 9:31 PM
    • 10,795 Posts
    • 8,668 Thanks
    gadgetmind
    An offer that couldn't be refused?
    Originally posted by greenglide
    I was <30 and they made me a millionaire overnight with performance-linked tasty upside. Yeah, young and foolish, but hey.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • JoeCrystal
    • By JoeCrystal 11th Jan 18, 11:58 AM
    • 1,406 Posts
    • 864 Thanks
    JoeCrystal
    I was <30 and they made me a millionaire overnight with performance-linked tasty upside. Yeah, young and foolish, but hey.
    Originally posted by gadgetmind
    Heh. Young maybe but certainly not foolish... Only a fool would turn down a million pounds!
    • greenglide
    • By greenglide 11th Jan 18, 3:41 PM
    • 3,104 Posts
    • 2,020 Thanks
    greenglide
    Not necessarily.

    If you could turn the M into, say, 200,000 or more every year it may be worth considering. Especially if there are long term growth possibilities.
    • gadgetmind
    • By gadgetmind 11th Jan 18, 3:52 PM
    • 10,795 Posts
    • 8,668 Thanks
    gadgetmind
    A company that could return 200k pa would be worth a wee bit more than 1m. Plus at age 30 you've got plenty more options for starting other ventures.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • andy001
    • By andy001 14th Jan 18, 5:09 PM
    • 42 Posts
    • 17 Thanks
    andy001
    Just to add some different perspective from other NHS pension dilemma thread: If suppose that OP is in NHS pension and is earning up to 210k. Is it still viable to stay in Pension in above situation?
    Originally posted by andy001
    Any views re NHS Please?
    Thanks
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