maxed out pension

[CatherineHeathcliffe]

Namechanged since I suspect I might be about to get flamed.

If you are maxed out on your pension (in terms of tax free sum) would you continue to put money in?

I own my own business and currently make a company contribution only into the pension each year (generally the max with then a small income by PAYE and dividends).

Are you maxed out on ISAs too?

yes - for this year

In this situation I wild see a financial advisor. Not ask randos on MN.
I’m sure you can afford it!

Im intending to do both but its useful to get views from others in the same situation

I would not, I would pay off mortgage or put into a saving account.
But my pension is very healthy. I would not put taxed money into it.

I wouldn't be putting taxed income into it. I would still get tax relief on entry but would be getting a higher rate income from the pension on retirement and have reached the max on my tax free lump sum (under current rules)

Oh I don't understand now - when you say maxed out what do you mean if not that you'd have to put taxed income into it?

Meaningful money podcast/group on Facebook is a good listen / community - personally, I'd keep going, don't let the tax tail wag the dog

I'd overpay my mortgage - DP did this year for the same reason

Do you have children? If so set them up with a junior isa and max out their allowance. If any children 18+ set them up with a LISA?

Sorry, I meant the pension now has £1.1m in it and so anything more I put in won't increased the tax free lump sum (on exit) and my income from the pension will be at a level where it is partially subject to higher rate tax.

Situation is basically (between us):

No mortgage on home
Maxed on Premium Bonds
Maxed for this year S&S ISA

I take about £110k out of my business each year but £60k goes into the pension and I take £50k as income.

Kids are actually also maxed out on their ISAs this year since they received an inheritance but they will have an allowance next tax year.

It's more of an ongoing issue about what we do with the money. Each year we are currently in a position to put the max into my pension (and this is efficient from a corporation tax perspective) but this ties it up until retirement.

I am 51.

Yes I would still put money into pension (and do) but I'm an additional rate taxpayer so the benefit is bigger than on your employment income.

Sorry no idea in that case!

Donate some to charity if you don’t need it

There you go..

I didn't say I don't need it and I already donate to charity thanks

I went part time at that stage. Do 1-2 days a week. Avoided the issue that way.

I am also maxed out and don't put more in my pension. DH is not maxed out so put more in his. Can you set up a SIPP for your spouse and put some in that?

DH is an additional rate tax payer and is affected by the pension taper so whilst his pension isn't nearly as healthy as mine he is limited by what he can put in.

I think the corporation tax issue means its still worth me continuing to put money into my pension (but I'm not entirely sure).

Tricky especially given the new rules on including pensions in inheritance tax. You could pass more
to your children? Build it up and then use it for their ISAs in future years? Have you considered VCTs?

Have you got carryover to use or did you pay 60k every year for last 3 yrs?

If not you should look at VCTs

I get good returns and good tax breaks

No carryover left

Why is carryover relevant? I thought you hadn't hit the 60k?

Are your kids working? Could they be employed by your business, and then you could pay them plus make pension contributions for them.

if they are already employed, could they do a part time role in your business, and be remunerated accordingly?

You can open pensions for children and put in £2880 annually - the gov tops this up to £3600.

I would use AI for this - perplexity is good.
no need for a financial advisor.

Do you get good returns on vcts. I’ve always thought they were risky.