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  • FIRST POST
    • buttercup26
    • By buttercup26 25th Feb 18, 9:16 PM
    • 1Posts
    • 0Thanks
    buttercup26
    Personal pension contribution advice please
    • #1
    • 25th Feb 18, 9:16 PM
    Personal pension contribution advice please 25th Feb 18 at 9:16 PM
    Dear all

    Iím a first time poster, and really hope somebody will be able to help with my query.
    I have a personal pension which I paid into while I was self-employed for a few years, until my self-employment ceased in Jan 2017.
    Since October 2017 Iíve been working part time, and reckon by the end of March 2018 I will have earned £5306.29, and paid £272.09 into a company pension scheme.
    My query is, how do I work out the maximum amount that I can pay into my personal pension, in order to maximise the tax relief on my pension contributions for the 2017-2018 tax year?

    Thanks very much
Page 1
    • Brynsam
    • By Brynsam 25th Feb 18, 11:15 PM
    • 916 Posts
    • 602 Thanks
    Brynsam
    • #2
    • 25th Feb 18, 11:15 PM
    • #2
    • 25th Feb 18, 11:15 PM
    See https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/carry-forward

    If you need more help, click on 'Where can I find out more?' and use the contact info for TPAS for free, impartial help.
    • Jerben
    • By Jerben 6th Mar 18, 8:32 PM
    • 62 Posts
    • 27 Thanks
    Jerben
    • #3
    • 6th Mar 18, 8:32 PM
    • #3
    • 6th Mar 18, 8:32 PM
    Looks like it's (5306 x 0.8) - 272 = £3972


    This net contribution (£3972) will be grossed up to £4965, by the addition of £993 tax relief.


    (I think this is how it works?)
    Unless anyone knows better?
    • Linton
    • By Linton 6th Mar 18, 9:34 PM
    • 9,373 Posts
    • 9,505 Thanks
    Linton
    • #4
    • 6th Mar 18, 9:34 PM
    • #4
    • 6th Mar 18, 9:34 PM
    Looks like it's (5306 x 0.8) - 272 = £3972


    This net contribution (£3972) will be grossed up to £4965, by the addition of £993 tax relief.


    (I think this is how it works?)
    Unless anyone knows better?
    Originally posted by Jerben
    Or perhaps more likely (5306-272)*0.8=£4027 with HMRC adding on £1007. Many company pension schemes pay the employee contribution gross. This assumes no other income and no other pension contributions in this tax year.
    • pvt
    • By pvt 7th Mar 18, 7:55 AM
    • 1,346 Posts
    • 1,069 Thanks
    pvt
    • #5
    • 7th Mar 18, 7:55 AM
    • #5
    • 7th Mar 18, 7:55 AM
    What is the situation with the employer's contribution. In this instance is the £272 the combined employee + employer contribution, or just the employee's contribution?

    And if it is a contribution to a DB scheme, does this calculation still apply?
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • Linton
    • By Linton 7th Mar 18, 9:00 AM
    • 9,373 Posts
    • 9,505 Thanks
    Linton
    • #6
    • 7th Mar 18, 9:00 AM
    • #6
    • 7th Mar 18, 9:00 AM
    What is the situation with the employer's contribution. In this instance is the £272 the combined employee + employer contribution, or just the employee's contribution?

    And if it is a contribution to a DB scheme, does this calculation still apply?
    Originally posted by pvt
    The calculation both for tax and for comparison with earnings only involves the employees actual contributions and is the same for DB and DC. It gets more complicated with DB pensions and the comparison against the £40K Annual Allowance.
    • pvt
    • By pvt 7th Mar 18, 5:03 PM
    • 1,346 Posts
    • 1,069 Thanks
    pvt
    • #7
    • 7th Mar 18, 5:03 PM
    • #7
    • 7th Mar 18, 5:03 PM
    The calculation both for tax and for comparison with earnings only involves the employees actual contributions and is the same for DB and DC. It gets more complicated with DB pensions and the comparison against the £40K Annual Allowance.
    Originally posted by Linton
    So if your total salary is well under £40k, it makes no difference if it's DB?

    I'm looking at doing a SIPP for my OH and salary is £13,000 gross, with a £715 employees pension contribution. I'm seeing (13000-715)*0.8 = £9,828 as the figure we can pay in - which would then be topped up to £12,285 with tax relief?

    And apologies to Buttercup for hijacking the thread
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
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