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
    • borb12
    • By borb12 7th May 18, 7:26 PM
    • 261Posts
    • 2,445Thanks
    borb12
    Work pension - limited on how much I can contribute
    • #1
    • 7th May 18, 7:26 PM
    Work pension - limited on how much I can contribute 7th May 18 at 7:26 PM
    I'm looking for pension advice. I earn 509 per month. I have started a workplace pension scheme voluntarily last month. Upon enquiring further they tell me the maximum I can contribute to my pension is 6.33 per month. I was looking to put away 80 as I am 32 years old and have started a pension a bit late in life but want to do the best for my future. The pension adviser at HR informed me I can only contribute the difference between their lower level 503 and what I earn at 509 which is where the 6.33 comes from (that is my 'pensionable salary'). Where can I obtain advice on where to get another pension or a way in which to contribute a lot more as I don't think I will be able to live off this amount in my retirement years and probably isn't worth doing. Thank you in advance for any help.
    2018 WINS: 2 books, day out at Guillivers, Boost party, bouquet of flowers, and a box of bath bombs

    Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind - Dr. Seuss
Page 1
    • Paul_Herring
    • By Paul_Herring 7th May 18, 8:11 PM
    • 6,366 Posts
    • 3,061 Thanks
    Paul_Herring
    • #2
    • 7th May 18, 8:11 PM
    • #2
    • 7th May 18, 8:11 PM
    They're going off their obligationto provide the absolute minimum requirements (other more enlightened companies start at 0, not 503.) The 503 is mentioned here:

    http://www.thepensionsregulator.gov.uk/automatic-enrolment-earnings-threshold.aspx



    It is not, however, a legal maximum for contributions:
    https://thepeoplespension.co.uk/help/knowledgebase/can-employees-andor-employers-contribute-legal-minimum-contribution/
    https://www.nestpensions.org.uk/schemeweb/nest/employers/get-ready-for-auto-enrolment/contributions.html

    I think whoever is in HR is either mistaken, or they don't want to complicate their bookkeeping by having people do anything but the default.

    What may limit your contributions however, is not being able to contribute enough to take your pay down below minimum wage, in which case you can contribute to a different (personal) pension fund where you can claim the income tax back.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • Dazed and confused
    • By Dazed and confused 7th May 18, 9:21 PM
    • 2,907 Posts
    • 1,418 Thanks
    Dazed and confused
    • #3
    • 7th May 18, 9:21 PM
    • #3
    • 7th May 18, 9:21 PM
    If the existing workplace pension is deducted before tax then it might make more sense for the op to open a personal pension in order to benefit from the basic rate relief which will be added by the pension company.

    The 80 proposed contribution could become 100 before even being invested.

    There might be other considerations which make the company pension the better option but it is possible the op is in reality not getting any real tax relief on the existing contributions due to the relatively low earnings.

    Obviously any income from other sources could alter this assumption.
    • cloud_dog
    • By cloud_dog 8th May 18, 10:21 AM
    • 3,840 Posts
    • 2,280 Thanks
    cloud_dog
    • #4
    • 8th May 18, 10:21 AM
    • #4
    • 8th May 18, 10:21 AM
    ^^^^^This^^^^^
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • borb12
    • By borb12 8th May 18, 11:30 AM
    • 261 Posts
    • 2,445 Thanks
    borb12
    • #5
    • 8th May 18, 11:30 AM
    • #5
    • 8th May 18, 11:30 AM
    No other income just that one. Wondering whether with my low income it is actually worth doing the work pension at all as their contribution of 2% on the 6 won't amount to much. Then if not a work pension where can I go to for advice on an alternative pension as still wish to put by for my retirement.
    2018 WINS: 2 books, day out at Guillivers, Boost party, bouquet of flowers, and a box of bath bombs

    Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind - Dr. Seuss
    • cloud_dog
    • By cloud_dog 8th May 18, 11:49 AM
    • 3,840 Posts
    • 2,280 Thanks
    cloud_dog
    • #6
    • 8th May 18, 11:49 AM
    • #6
    • 8th May 18, 11:49 AM
    No other income just that one. Wondering whether with my low income it is actually worth doing the work pension at all as their contribution of 2% on the 6 won't amount to much.
    Originally posted by borb12
    But you are getting free money from the company. You are only earning a small amount therefore the contributions are small. As far as I am aware (and as others have said) there shouldn't be a limit to you contributing more in to the works scheme (assuming you do not contribute more than would take you below your minimum earnings level).

    Then if not a work pension where can I go to for advice on an alternative pension as still wish to put by for my retirement.
    Originally posted by borb12
    You've said that you want to contribute an additional 80 so you can quite easily do that by opening a personal pension or a SIPP.

    Additionally, you would benefit from the pension tax relief from the government. So for you this would be a free 25%. Based on your 80, 100 would actually be credited to your personal pension or SIPP.

    Regarding a pension, we don't know enough about your feelings towards managing your pension investments etc so it is really difficult to offer any guidance in that area.

    As a fall back you might want to consider taking about a Aviva Stakeholder pension through Cavendish. There is a one-off set up fee 35 or 40 (depending on proof of identification documents) but you will benefit from a lower annual charge on the investment of 0.55%.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • xylophone
    • By xylophone 8th May 18, 12:25 PM
    • 26,484 Posts
    • 15,724 Thanks
    xylophone
    • #7
    • 8th May 18, 12:25 PM
    • #7
    • 8th May 18, 12:25 PM
    What is the name of the scheme?

    Does it operate "relief at source" or "net pay"?

    https://thepeoplespension.co.uk/help/knowledgebase/are-the-contributions-paid-net-or-gross/
    • borb12
    • By borb12 8th May 18, 1:21 PM
    • 261 Posts
    • 2,445 Thanks
    borb12
    • #8
    • 8th May 18, 1:21 PM
    • #8
    • 8th May 18, 1:21 PM
    Should I go to a financial planning service for advice on private pensions then as this seems the only pension where I can put aside enough to make worthwhile having a pension. I feel I need to meet someone to sit down and go through all the available/suitable options in order to understand it.
    2018 WINS: 2 books, day out at Guillivers, Boost party, bouquet of flowers, and a box of bath bombs

    Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind - Dr. Seuss
    • cloud_dog
    • By cloud_dog 8th May 18, 2:25 PM
    • 3,840 Posts
    • 2,280 Thanks
    cloud_dog
    • #9
    • 8th May 18, 2:25 PM
    • #9
    • 8th May 18, 2:25 PM
    It really doesn't need to be that complicated, although if you feel you need that kind of support then that is what you may need to do. The costs are going to be considerable considering the monies involved though.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • xylophone
    • By xylophone 8th May 18, 3:47 PM
    • 26,484 Posts
    • 15,724 Thanks
    xylophone
    What are the answers to the questions posed in my post above?
    • kidmugsy
    • By kidmugsy 8th May 18, 4:04 PM
    • 11,576 Posts
    • 8,101 Thanks
    kidmugsy
    Should I go to a financial planning service for advice on private pensions?
    Originally posted by borb12
    I suggest that you begin by visiting the website of Hargreaves Lansdown. You can learn an awful lot there free, at your own pace.

    If you decide to open a SIPP, for instance, they would be a candidate provider for you. If you wanted a Personal Pension or Stakeholder Pension then there's Cavendish. There are other firms mentioned at the monevator blog, which tabulates their charges.
    http://monevator.com/compare-uk-cheapest-online-brokers/
    Free the dunston one next time too.
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

3,773Posts Today

8,500Users online

Martin's Twitter
  • RT @Dora_Haf: @MartinSLewis So many people on here saying they're great until you get your PROPER job. What if Your proper job Is ON zero?

  • RT @hslt88: @MartinSLewis I?m a trustee for a youth charity. We only have a limited pool of funds for flexible youth workers for holiday sc?

  • RT @Dan_i_elle_88: @MartinSLewis Loved working zero hour agency care work. Never out of work and I loved having the flexibility! Only left?

  • Follow Martin