Youngsters looks away. Pension question.

[Stevo1987]

I wouldn't normally post this sort of question here but I am struggling to find an answer. I also know there are few, ahem, older Zedders on this forum. The question - I am going to pay a lump sum into my work pension. How do I claim the tax relief? Do I just fill in tax return?

 

[Zedebee]

Your work pension should automatically add on basic rate tax relief and if you are a higher rate tax payer, you claim the difference on your tax return.

 

[Stevo1987]

Your work pension should automatically add on basic rate tax relief and if you are a higher rate tax payer, you claim the difference on your tax return.

They do on monthly contributions aka paye but it different on a one off lump sum. But yeah, I think I will have to do a tax return even though I am paye.

 

[Mr Tidy]

They do on monthly contributions aka paye but it different on a one off lump sum. But yeah, I think I will have to do a tax return even though I am paye.

Yes I paid monthly AVCs for years and it was all done PAYE, but there was an upper limit to how much I could contribute - IIRC it was 15% of annual salary in any one tax year.

So there may also be a limit to how much you can get tax relief on.

 

[Stevo1987]

They do on monthly contributions aka paye but it different on a one off lump sum. But yeah, I think I will have to do a tax return even though I am paye.

Yes I paid monthly AVCs for years and it was all done PAYE, but there was an upper limit to how much I could contribute - IIRC it was 15% of annual salary in any one tax year.

So there may also be a limit to how much you can get tax relief on.

For me it is £40k.

 

[Zedebee]

Pension rules are complicated. You may be able to put in more than £40k if you haven’t used up previous years’ allowances. To answer your original question more succinctly, you’ll defo have to complete a tax return if you want to claim anything other than basic rate tax relief.

 

[Tommo61]

Can you get your employer to make the payment directly from your pre-tax earnings? If so, there will be no tax deducted, the money will get invested without any delays or need for you to reclaim.

 

[Stevo1987]

Can you get your employer to make the payment directly from your pre-tax earnings? If so, there will be no tax deducted, the money will get invested without any delays or need for you to reclaim.

I think they can do that but I am going to, ahem, max it out. I just turned 58 and having the money sat in my savings account is pointless so I think putting into the pension would be the best bet. In a couple of years and I will be thinking of retiring. I will approach my company and ask to work only 3 days a week in the first instance though. Whether they will go with that I dunno. I do have a cunning plan up my sleeve.

 

[Tommo61]

Can you get your employer to make the payment directly from your pre-tax earnings? If so, there will be no tax deducted, the money will get invested without any delays or need for you to reclaim.

I think they can do that but I am going to, ahem, max it out. I just turned 58 and having the money sat in my savings account is pointless so I think putting into the pension would be the best bet. In a couple of years and I will be thinking of retiring. I will approach my company and ask to work only 3 days a week in the first instance though. Whether they will go with that I dunno. I do have a cunning plan up my sleeve.

Ah, ok. I was able to to that with a redundancy payment a few years ago and count back 4 years to use up all my allowances. Fortunately I managed to convince the payroll people to do it directly.

 

[Rucky]

No disrespect to anybody on here but getting pension advice from a forum is probably not the best way forward......
Would you ask a Z4 owning pension advisor how to change your front suspension - probably not?
Whilst I agree there is the facility on your tax return there are Smarter ways to get advice that need not costa fortune.
Having taken early retitrement and a severance package in combination with a 40 yr pension whilst I knew what I wanted to do with the money (SIP) I still paid (NFU ) advisor to find the most tax effective route rather than risk additional (avoidable) tax.

Its not just what you put in - it is also what you might want to take out when the time comes?
Good luck

 

[Stevo1987]

No disrespect to anybody on here but getting pension advice from a forum is probably not the best way forward......
Would you ask a Z4 owning pension advisor how to change your front suspension - probably not?
Whilst I agree there is the facility on your tax return there are Smarter ways to get advice that need not costa fortune.
Having taken early retitrement and a severance package in combination with a 40 yr pension whilst I knew what I wanted to do with the money (SIP) I still paid (NFU ) advisor to find the most tax effective route rather than risk additional (avoidable) tax.

Its not just what you put in - it is also what you might want to take out when the time comes?
Good luck

Well, this true I guess. This is a bit like having a chat in the pub. (remember pubs ) I will speak to HRMC. If I can get through.

 

[M1k3yC]

Well, this true I guess. This is a bit like having a chat in the pub. (remember pubs ) I will speak to HRMC. If I can get through.

I suggest you also speak to your HR department and pension provider. My pension provider would answer this question and talk through the options and mechanics of it at no cost. Advice from my pension provider, however, would be terrifyingly expensive.