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    • redwolf
    • By redwolf 13th Oct 18, 6:07 PM
    • 7Posts
    • 1Thanks
    redwolf
    Non tax payer over 55 Advice needed
    • #1
    • 13th Oct 18, 6:07 PM
    Non tax payer over 55 Advice needed 13th Oct 18 at 6:07 PM
    My wife works part time for a supermarket
    She does not pay income tax
    Shes 57 years old

    Advice needed
    1)Her pension pot is about 23k - with 2 providers
    Could she ask for this full pot now and take it ?
    Would this make sense ?

    If she continues to work and the pot goes over 30k what will that mean when she stops working.?

    She pays in a small monthly amount 6% above the minimum 2% rate and her employer puts in about 3%
    Would she be better just paying this extra into a bank account since she doesnt pay Tax?

    Any thoughts appreciated
Page 1
    • MallyGirl
    • By MallyGirl 13th Oct 18, 6:21 PM
    • 3,122 Posts
    • 8,156 Thanks
    MallyGirl
    • #2
    • 13th Oct 18, 6:21 PM
    • #2
    • 13th Oct 18, 6:21 PM
    You still get tax relief on pension contributions even if she doesn't pay tax. That is a 20% bonus
    • redwolf
    • By redwolf 13th Oct 18, 6:31 PM
    • 7 Posts
    • 1 Thanks
    redwolf
    • #3
    • 13th Oct 18, 6:31 PM
    • #3
    • 13th Oct 18, 6:31 PM
    Can you explain that statement ?
    As far as i can see if she puts say 80 a month into pension
    she takes that from her pay so wouldn't pay tax on it anyway ?

    If she paid the 80 into a savings account wouldn't it be the same thing but
    on maturity wouldn't be stuck by all those pension rules
    • Albermarle
    • By Albermarle 13th Oct 18, 6:53 PM
    • 237 Posts
    • 122 Thanks
    Albermarle
    • #4
    • 13th Oct 18, 6:53 PM
    • #4
    • 13th Oct 18, 6:53 PM
    No , because when she pays 80 into a pension the pension provider will claim back tax relief from HMRC . So the 80 will become 100 . If you check the info from the pension provider you should be able to see this happening . Then the employer also puts in 3 % .
    As she is not earning a large salary there will be some limits in how much tax relief can be claimed but normally saving via a pension is more tax efficient than any other way . The downside is the money is not readily accessible until age 55.
    • Dazed and confused
    • By Dazed and confused 13th Oct 18, 7:01 PM
    • 3,288 Posts
    • 1,655 Thanks
    Dazed and confused
    • #5
    • 13th Oct 18, 7:01 PM
    • #5
    • 13th Oct 18, 7:01 PM
    I don't think the op had provided enough information to be certain that his wife is actually entitled to or is receiving a tax relief top up from the supermarket pension.

    It is possible she is under a net pay arrangement so has say a salary of 8,000, pays 640 into the pension scheme leaving taxable pay of 7,360.
    • xylophone
    • By xylophone 13th Oct 18, 7:02 PM
    • 27,645 Posts
    • 16,609 Thanks
    xylophone
    • #6
    • 13th Oct 18, 7:02 PM
    • #6
    • 13th Oct 18, 7:02 PM
    She does not earn enough to pay tax?

    How is the tax relief in the workplace pension scheme given?

    If not "Relief at Source" she might be better off paying only as much into the workplace pension as gets her the maximum employer contribution and putting the rest into a personal pension.

    You note that this particular scheme will "top up" but this is not usual.

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

    https://www.moneymarketing.co.uk/issues/20-july-2017/ros-altmann-radar-pension-tax-scandal/
    • redwolf
    • By redwolf 13th Oct 18, 7:15 PM
    • 7 Posts
    • 1 Thanks
    redwolf
    • #7
    • 13th Oct 18, 7:15 PM
    • #7
    • 13th Oct 18, 7:15 PM
    Thanks for those links the second one shows the issue it seems to confirm what i thought that she is not getting any tax relief as she doesnt pay tax

    i dont believe she is getting a tax top up all i see on pension statements is
    employer contribution and hers

    dazed you are correct but since her tax code is 11k and she earns 8k
    the only advantage i see is the employers 3%
    • Dazed and confused
    • By Dazed and confused 13th Oct 18, 7:18 PM
    • 3,288 Posts
    • 1,655 Thanks
    Dazed and confused
    • #8
    • 13th Oct 18, 7:18 PM
    • #8
    • 13th Oct 18, 7:18 PM
    Not related to pensions but has your wife considered applying for Marriage Allowance?

    As far as the pension is concerned she would need to think carefully about giving up something which effectively includes free money (from the employer) but the "tax relief" she is getting seems to be of no benefit in her particular circumstances.
    • redwolf
    • By redwolf 13th Oct 18, 7:20 PM
    • 7 Posts
    • 1 Thanks
    redwolf
    • #9
    • 13th Oct 18, 7:20 PM
    • #9
    • 13th Oct 18, 7:20 PM
    yes i claim the marriage allowance as its of no use to her since she doesnt pay tax anyway i do.

    agreed dazed
    • xylophone
    • By xylophone 13th Oct 18, 7:54 PM
    • 27,645 Posts
    • 16,609 Thanks
    xylophone
    Thanks for those links the second one shows the issue it seems to confirm what i thought that she is not getting any tax relief as she doesnt pay tax
    If the Scheme operates "Relief at Source", then it is immaterial that she does not pay tax - she will still receive tax relief.

    Are you certain that the scheme operates "Net Pay"?

    Which supermarket is it?

    Is the pension booklet on the net? If not, what does the pension booklet she will have been given say about tax relief?
    • redwolf
    • By redwolf 13th Oct 18, 8:00 PM
    • 7 Posts
    • 1 Thanks
    redwolf
    i will look
    its ASDA

    Thanks all
    • xylophone
    • By xylophone 13th Oct 18, 8:09 PM
    • 27,645 Posts
    • 16,609 Thanks
    xylophone
    If the pension booklet is not clear, she should ask the scheme administrator.
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