CMS and excessive pension contributions

[ComingRoundAgain]

Has anyone successfully challenged excessive pension payments through CMS?

My exh declared a large private pension payment to CMS which resulted in a £130 reduction in the monthly payments.

This pension contribution was apparently paid outside of his PAYE earnings. So from from his net salary.

Thing is, this money constitutes 28% of his post tax earnings.

To have come up with that money himself, he would have had to have saved avg £750 a month on his £32k salary.

I think this was money either earnt and not declared to HMRC, or gifted to him by his Dad (a regular occurrence).

Have raised with CMS and asked if they can look into / ask for evidence of where that money came from.

Positive outcome likely at all???

Unlikely. 28% is not an exaggerated pension contribution. Depending on his age, he should probably contribute more.

and if his father was to gift him this money it seems like a sensible place to put it.
i get that it robs his child of a better life but ultimately we all need to take care of our own future in a somewhat responsible way.

Unlikely I think. Sorry

Does your ex live at home with his parents? If he does, he could easily have saved that much.

He’s pushing 50. I don’t care where he puts his money. But he’s not on a high salary and that £9k was taken off his annual salary to recalculate lower CM. But I don’t think that £9k was earnt income

Are you me?!

I've just started a CMS claim because of this. Ex is putting 33% of his £32k salary in pension to divert income. It coincides with a raise as his older children have aged out of their maintenance. Actually the advisor I spoke to said that was an extremely high figure and they do see it as obstructive diversion in many cases. I am now waiting for the assessment to be sorted so I can ask for a variation. There are no guarantees but I'm so disgusted, I have to try.

If he's on £32k pa, his take home will be about £25,200.

So if he saved £9k, he lived on £16,200 for a year. It's possible. People do manage on that.

Good luck though.

The advisor is clueless. There is no percentage deemed as high.

I dont think you will get very far with this. But no harm in trying.

No harm trying.

Really? She was quite clear that there are no guarantees. I'm amazed anyone thinks this is reasonable.

Why?

You are supposed to increase your pension contribution as you grow older in order to support yourself after retiring. You can consult the CMS guidelines.

You should focus your energy on increasing your earning potential instead of depending on a payments that can disappear any day without notice.

Very little chance - CMS is assessed after pension contributions, and there’s nothing to stop them ploughing much more (which as PP has said, is generally advised after a certain age)

This table is from the CMS guidelines.

Gross Income Benchmark gross replacement rate %
Less than £9,500 80 %
£9,500 - £17,499 70 %
£17,500 - £24,999 67 %
£25,000 - £49,999 60 %
£50,000 + 50 %

The criteria are that depending on your salary, your pension contributions should allow you to have a certain % of your income on retirement. For example, if you earn 60,000, your pension contribution should allow you to have a 30,000 salary (50%) on retirement. Put the number on a retirement calculator, and you can get what is considered reasonable. You will be amazed to find out that putting 5%,10% or even 20% will give you so little in retirement that you will live in poverty.

Mine was paid his bonus quarterly. He got his payroll to submit the two wage slips for the non-bonus month to CMS thus ensuring I got £50 a week (he was a higher earner). Many years later I itch to tell DC but manage to keep a lid on it.

You should focus your energy on increasing your earning potential instead of depending on a payments that can disappear any day without notice.

Why should only one parent have to provide for their child?

Yeah. You're also meant to support your own children. Plenty of resident parents have to lower their pension contributions to be able to support their children adequately. Why should the non-resident be able to save for a comfortable retirement at their expense?

This is why CMS needs completely overhauling and treating as a tax, with enforcement as for other taxes that if you don't pay or employ aggressive avoidance tactics you will be imprisoned. And obviously contribution rates raising to reflect somewhere around 50% of the actual costs of housing and raising a child properly.

And plenty of resident parents don't.

They should both provide but relying in something you don't have control of will end in tears.

Yes it often does. But it wouldn't be so risky if CMS enforced it properly like a tax as I said. I noticed you didn't respond to that part.

We don't need the money, @taxpayer1 but I hardly think that's relevant. What, some parents (let's be honest, dads), will do anything they can to avoid paying, so don't try or expect it enforcing? Disgraceful.

My DD has 2 parents, one who spends his time sobbing about how hard done by he is while refusing to support the child he claims to love so much. I don't rely on it but I don't see why this diversion of income should be deemed acceptable. It's disgusting. We can't put away £800 a month pension as we are too busy providing.

I have consulted those guidelines, btw, and a man of my exes age isn't expected to be putting this much away. It's simply to avoid taking financial responsibility.

I think, actually, it's attitudes like this which contribute to so many men thinking this is okay. It isn't. No wonder the CMS don't have the resources when people just shrug and tell primary carers to suck it up.

So who is going to provide for him when you retire? You?