Any accountants able to answer a quick pension question?

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Hallo, I have a basic pension question that I’m not sure about. Can anyone tell me roughly how much tax relief I’d get based on the following?

• I currently pay 3% into my employer pension, employer pays 5%. This works out as £190 pm from me and about £100 a month from my employer
• i also pay £100 a month into a separate private pension, and receive £25 tax relief on this.

I earn £54k pa so I only just fall into the higher tax bracket.

My question is, if I start paying an extra £200 into the private pension - do I get £50 a month tax relief (ie 25% on £200) or will it be £40 ie 20%.

I think I have to claim back any additional tax relief myself, is that right, as the private pension won’t do this for me?

Thanks for any advice - I’m not good at this stuff!

Here's a handy calculator for you!

www.hl.co.uk/pensions/tax-relief/calculator

Thank you! I’m still confused as to how it’s worked out though. If I’m making contributions through my employer pension, does that affect the extra bit I’m putting in to my separate private pension? I’m not sure how I can find this out :/

Might need more information on your workplace pension - is it deducted from your salary before tax and NI (salary sacrifice) or after? If before, you're already getting your tax relief, if after, you will be getting your basic rate relief back, but you would need your claim the higher rate relief (by way of a tax return or PAYE tax code amendment).

Your personal pension contributions are definitely paid AFTER tax, again, the basic rate relief is already dealt with, but as above, you need to claim the higher rate relief.

I'm in a similar situation and reclaim via tax return, but I'm an accountant, so it's fairly straightforward for me to do. If you can bear to sit on the phone for hours, it's usually easier to get your tax code adjusted, you will need details of all your contributions to allow them to calculate what you're due plus how they should ensure your code is correct for ongoing contributions. You will also need to keep your code updated in case of changes to your contributions.

Yes the higher rate relief won't get calculated automatically. Plus how you pay the additional contributions will make a difference. Are you doing this through the payroll or directly?

I currently pay 3% into my employer pension, employer pays 5%. This works out as £190 pm from me and about £100 a month from my employer

This doesn't sound right - surely the 5% contribution is bigger than the 3%? Might be worth checking the right amounts are being taken / contributed.

You can have tax relief on 2 pensions. HMRC knows!

My employer pays in more than me. I work in the NHS.

Is out better to do anything extra with work pension, assuming it's salary sacrifice as that saves you 10% ni too?

Great but not really the point, OP is clearly not in a DB public sector scheme.
The question is how come your 3% = £190pm where the employers 5% = £100pm. Needs checking.

Isn't the employers 3% or 5% copied at max £50k salary. I know that's how our auto enrollment scheme works

Usually as standard the employee side has but they can choose to pay more anyway.

Possibly, they are allowed to cap but those actual £ contributions still fail the sniff test! If the employer is only putting in £100pm, that's just over 2% of OP's salary. I'd think looking for a new job or negotiating a better contribution might be worthwhile!

True

Our capped max payments are £125 pm (3% of £50k)

But maybe she has non pensionable items in her salary? One to ask hr how the pension works before thinking about putting more in somewhere.

Thanks for all the replies. I’ve unwittingly confused things I think - I pay in c. £190 a month, my employer pays c. £110 a month. So they are paying the 3%, I’m paying the 5%.

Knowing the firm, there will be a cap - anything to pay less - but I didn’t know this existed!

It sounds like I can still claim tax relief on my other, private pension? The bulk of that relief would be at 25%, with a small portion at 20%, is that right? It is surprisingly difficult to get this information.

Well you pay the money

Say £80

Pension company adds £20 and £100 into pension.

You go tax return and may pay less tax if you are a 40% tax payer.

But you are usually better off topping up work pension if it saxes you national insurance.