Increasing Pension Contributions

[Deleted User]

I pay 10% and company pays 10%.

 

[Deleted User]

If you don't mind me asking, what % were you paying in, and what have you upped it to? I currently put in 9.3% but that's NHS. I wonder if I put in more, would my employer up there's too or would it just be me paying in more?

They usually match you up to a certain point, 10% in my case so that's what I do.

You can obviously put far more in.

 

[Deleted User]

I've already been putting in the maximum to my pension, I can't put in any more as it'll take me below the national minimum wage.

A lad at work had a share save scheme mature some yrs ago giving him 20k so he decided to contribute his entire monthly salary into his pension for 12 mths and live off his windfall.

He lived off extra's like callout, overtime etc so still picked something up each month.

The following tax year it was deemed he earned below national wage and he got 6k from the state!

Needless to say the rules changed not long after.

 

[Cirrus]

Towards the end of my career in a large corporate was putting significant amounts into AVCs, and when I negotiated a leaving package a large chunk of that went into the AVCs as well, which served me well as though it didn't increase the monthly pension amount it did meant I could take it out as a tax free lump sum.

 

[jowwy]

So no one is increasing their contribution to their pension then - to offset the rise in NI........

 

[midlife]

Nope. I think I give 15% of my income towards my pension and not sure I can change it.

 

[fossyant]

So no one is increasing their contribution to their pension then - to offset the rise in NI........

Many of us can't, but I'd advise putting in as much as you can afford. It's not going to make a huge difference to the extra NI you pay.

 

[jowwy]

Many of us can't, but I'd advise putting in as much as you can afford. It's not going to make a huge difference to the extra NI you pay.

it will....cause NI and tax is taken out after my Pension contribution, therefore less salary to tax....which means less tax paid and NI paid

thats the benefit of a salary sacrifice scheme

 

[yello]

Yep, agreed, check your state pension records.

My wife's pension went from being paid up to 2 years shy, no idea why, just 'rule changes' they said. It wasn't a problem to buy a couple of years though (we've been In France for the last 14 years BTW) - the second year only cost something like £2.40 or suchlike.

Pensions are one of those things that I really don't understand (finance generally tbh) and my eyes glaze over whenever a pensions expert starts talking.

 

[Deleted User]

Nope. I think I give 15% of my income towards my pension and not sure I can change it.

I would be surprised you can't change it, unless your company has set a 15% limit.

 

[oldwheels]

My pensions are a bit complicated as I went from employed to self employed and had largely to sort out my own. My wife had a similar problem so we had separate pensions but some proviso that if one died early then a proportion of their pension would still be paid to the survivor. It was more expensive but worth it I think.
HMRC do not help by making one of my pensions taxable but then have to refund the tax at the end of the financial year. I have spent what probably amounts to days on the phone trying to sort this out but it never works tho they assure me it will be sorted but never is.
I have enough for my needs tho' not necessarily for all my wants. For example I may want to sell up and move to the mainland but that would be a financial problem I could not solve partly due to my age and also difference in house values. I would be just possible I think but clear me out financially which would not be a comfortable position to be in.

 

[Electric_Andy]

Many of us can't, but I'd advise putting in as much as you can afford. It's not going to make a huge difference to the extra NI you pay.

So for example, if I opt to pay in an extra £60/month into my pension, instead of that going into my 0.00001% interest savings account, would it work out better in the long run? I'm hoping to take my NHS pension in 15 years when I'm 55

 

[Deleted User]

So no one is increasing their contribution to their pension then - to offset the rise in NI........

I think you've got that wrong, I'm pretty sure NI is calculated on you're Gross earnings so paid on your contributions.
I know it's Tax efficient.
Feel free to check and let us know.

 

[midlife]

I would be surprised you can't change it, unless your company has set a 15% limit.

NHS pension, can buy add ones but as I have been paying since 1982 I think I can get in my 40 years

 

[Tom...]

it will....cause NI and tax is taken out after my Pension contribution, therefore less salary to tax....which means less tax paid and NI paid

thats the benefit of a salary sacrifice scheme

That's how the majority of pensions work, and not quite what salary sacrifice is.