Pension help

[Anono2022]

Hi I am looking for advice.

I am looking for pay around a £3000 lump sum into pension. This needs to be done before the tax year ends I have two bigger ones, previous was with NEST and now LGPS and a few smaller pensions from jobs when I was younger

Ideally I'd like to pay it into my current one but I find it all so confusing. And the fact I need to reclaim my own tax relief is making me want to just put in into my NEST for ease as they do all the reclaiming automatically. But I've heard NEST charge a high fee on contributions. Is this true?

LGPS has been vague in all honesty and I cannot pay it in via my salary which I would have preferred. So it has to be a lump sum. I checked with Payroll. They won't allow any extra via salary. APCs appear the most beneficial but it really does confuse me and as I say the self assessment to reclaim my tax is really off-putting. I also appreciate time isn't on my side either as this does need to go into my pension ASAP. But is NEST a bad way to invest?

Thanks in advance

I don't know what NEST means but claiming the tax back in a self assessment tex return is not complicated. You'll have until Jan 2024 to do that but you will just need your p60 and the figure of the 3k. So you could go with current scheme and set up a regular payment for the new tax year which will come off at source.

Sounding totally stupid here but the additional lump sum won't be on my P60? Or do you mean take the lump sum amount off my net pay on my P60?

Nest is a pension provider

You don't necessarily have to pay the lump sum in one go. You can carry forward past years unused allowance so increase monthly contributions in the next tax year to use up next year's allowance and current year. I think it's more tax efficient that way as you save on NI.

NEST is supposed to provide low cost pension saving so I doubt their charges are high when compared to the market more broadly. Their website says the charge on new contributions is 1.8% which would mean that of your £3k they will charge you £54 which doesn't seem excessive. You are then charged an annual management fee of 0.3% of your total account value.

As for whether investing through NEST is "good" that will depend on the investment options you select and how they perform.

l assume (but don't know) that LGPS additional contributions are used to provide defined contribution benefits, and if so you ought to be able to get info on their contribution and management charges too.

You are unlikely to be able to make a lump sum contribution via your salary if this leaves your take home pay less than minimum wage.

Your staff web portal should have a link with information on how to pay additional contributions to your LGPS scheme. You can certainly make payments via your salary and they will sort the tax.

As PP advised, you will only be able to access this at state pension age.