mogish
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Post by mogish on Aug 10, 2023 11:08:18 GMT
Does anyone know much about this?
I have my own Sipp and am also in Lgps.
Considering using my salary to pay into my own sipp and benefit from reducing Ni and tax.
Planning to retire in 2 years.
Can anyone shed light on this?
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Post by overthehill on Aug 10, 2023 11:46:12 GMT
Does anyone know much about this? I have my own Sipp and am also in Lgps. Considering using my salary to pay into my own sipp and benefit from reducing Ni and tax. Planning to retire in 2 years. Can anyone shed light on this?
Don't think you can reduce NI contributions as an employee. In terms of tax you're unlikely to be worse off under any scenario. Every high tax earner has been doing it for decades.
Hard to comment on a complex subject without specific questions.
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mogish
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Post by mogish on Aug 10, 2023 20:15:45 GMT
Indeed. If I make AVC contributions of my gross salary I believe this will reduce myNI conts and tax?
Instead of paying AVCs in to Lgps, can I pay these into my own Sipp? With same benefits?
Alternatively I could pay my entire salary in to my own Sipp ea financial year however I would not benefit from NI savings.
Can anyone advise on this subject.
Tia
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Post by bracknellboy on Aug 10, 2023 20:58:13 GMT
I would suggest you need to talk to your pension scheme provider as a starting point. I see you have used the term Lgps but not explained what you mean: I've now determined that is the Local govt. Pension Scheme.
I would imagine this is setup so that it is a salary sacrifice scheme for main contributions: that means that the employer and employee benefit from reduced NI contributions (IIRC). However, who knows how any AVCs into the scheme would be dealt with/treated ? There may also be specific conditions about when you opt to do increased contributions. IN my last employer, they needed to be made ahead of the financial year and then were fixed for the year. Unless there is someone on here who knows the ins and outs of the LGPS then you are unlikely to get a 'secure' answer. Even someone who might have been contributing to it 5 years ago may not be able to answer as to how it works in detail now.
EDIT: I've just realised you seem to be discussing about paying into your separate SIPP, and expecting to get NI relief. How is that going to work - how are you going to pay into your own SIPP from gross salary (which effectively means your employer paying into it) ? As opposed to from 'take home'. You must have reason to think this is possible so is it something that your scheme / employer allow ? Not something I've heard of before.
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Post by mostlywrong on Aug 11, 2023 8:00:02 GMT
This is a complex world. My amateurish view:
- You are signed up to your company's pension scheme.
- Assuming that it offers AVCs, it makes more sense to use them.
- Watch the Annual Allowance, currently £60k.
- Be aware that Labour has already said that it will re-introduce the tax on large pension pots.
- As you are close to pension age and you are in a large pension scheme, you will, almost certainly, have been contracted out. Your state pension will NOT reach the amount that the paperwork says it will because that paperwork is based on the average worker who wasn't contracted out. Ring the Future Pension Centre and find out.
MW
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mogish
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Post by mogish on Aug 11, 2023 14:41:23 GMT
Thanks for all the respondents.
I agree, I need to contact the pension experts to take accurate advice.
Thanks all👍
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Post by mostlywrong on Aug 11, 2023 17:05:02 GMT
Thanks for all the respondents. I agree, I need to contact the pension experts to take accurate advice. Thanks all👍 Hold on...
That depends on what you think are "pension experts". The average financial consultant on the High Street will have little information on the whys and wherefores of your occupational pension. They will try and flog you something else completely.
Bracknellboy is correct: contact your current pension provider first. They will have the documentation you need. Have you tried your Trades Union?? They might have an office that can provide advice.
MW
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mogish
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Post by mogish on Aug 12, 2023 17:48:10 GMT
I wont get NI relief on Sipp conts but can get them reduced from paying Avc from gross salary. I just dont want do this via Lgps( local government Pension)as I may retire in 2 years.
I think pension bee can assist . My work pension department were pretty useless.
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Post by overthehill on Aug 12, 2023 19:22:29 GMT
I wont get NI relief on Sipp conts but can get them reduced from paying Avc from gross salary. I just dont want do this via Lgps( local government Pension)as I may retire in 2 years. I think pension bee can assist . My work pension department were pretty useless.
I can only guess that the NI savings is small change compared to the potential tax savings. As the most basic example, the SIPP lets you deposit 40k before you retire and have a minimum of 10k tax rebate added which you can then withdraw at 12.5k pa tax free over the next four years. I've never put AVCs into any personal pension scheme , only a SIPP. I also transferred all my DB and DC pensions into a SIPP. You have much more control over payments, tax liability, investment strategies, charges and outcomes (pension black holes)
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