Latest LC19 pension guide (v5)

[Loan Ranger]

Includes more on protected (open) years.

LC19 - Pension Contributions v5

[CanPayButWouldRatherNot]

If the loan charge gets punted .. what about the pension fix ?

Includes more on protected (open) years.

LC19 - Pension Contributions v5

Lone ranger ... thanks for this option for open years which I did (paid a personal pension contribution in 18/19 to cover my aged open year loan from 09/09)

right now I am a bit concerned tho that if the loan charge gets pushed back or scrapped ... then I did the pension payment for nothing which is a pain.

[starstruck]

Lone ranger ... thanks for this option for open years which I did (paid a personal pension contribution in 18/19 to cover my aged open year loan from 09/09)

right now I am a bit concerned tho that if the loan charge gets pushed back or scrapped ... then I did the pension payment for nothing which is a pain.

If you paid over your 2018/19 net relevant earnings (which your loans would have contributed to) then you can get that amount back from your pension provider (the bit over the NRE). If you didn't then the money is locked away and you'll have more enjoyment in retirement.

[MrTickle]

Includes more on protected (open) years.

LC19 - Pension Contributions v5

Possibly a dumb question, but is this still workable? Your helpful document talks about pension contributions in the last tax year, 2018/9. I assume there's no way to make a pension contribution to 2018/9 now?

[starstruck]

Possibly a dumb question, but is this still workable? Your helpful document talks about pension contributions in the last tax year, 2018/9. I assume there's no way to make a pension contribution to 2018/9 now?

Correct, the tax year has ended.

[webberg]

If you paid over your 2018/19 net relevant earnings (which your loans would have contributed to) then you can get that amount back from your pension provider (the bit over the NRE). If you didn't then the money is locked away and you'll have more enjoyment in retirement.

Do you have a link that proves this is correct please?

I have a concern that a premium paid in excess of the allowable value is taxed.

[starstruck]

Do you have a link that proves this is correct please?

I have a concern that a premium paid in excess of the allowable value is taxed.

Payments in excess of the annual allowance (including carry forward) are taxed. Payments in excess of net relevant earnings can be requested back. Google "refund of excess contributions lump sum".

[webberg]

Payments in excess of the annual allowance (including carry forward) are taxed. Payments in excess of net relevant earnings can be requested back. Google "refund of excess contributions lump sum".

So, if in 2018/19, salary was 50,000 and loans 100,000, NRE are £150,000.

You could, assuming that previous years allowances are untouched, make a gross premium of £160,000 (cash £128,000).

You make a premium of £150,000 gross - £120,000 cash.

The loans are removed from the equation.

You NRE is now £50,000.

You can reclaim £100,000 gross, £80,000 net contributions from the provider.

You have paid £50,000 gross, £40,000 net and in theory have no tax to pay in the year.

Do I have that right?

[starstruck]

So, if in 2018/19, salary was 50,000 and loans 100,000, NRE are £150,000.

You could, assuming that previous years allowances are untouched, make a gross premium of £160,000 (cash £128,000).

You make a premium of £150,000 gross - £120,000 cash.

The loans are removed from the equation.

You NRE is now £50,000.

You can reclaim £100,000 gross, £80,000 net contributions from the provider.

You have paid £50,000 gross, £40,000 net and in theory have no tax to pay in the year.

Do I have that right?

I'm no pensions expert, but this is my understanding, it may not be correct.

You could pay gross £165K as 2015/16 had an allowance of £45k rather than £40k.

But let's ignore than and stick with your numbers.

LC removed

NRE = £50k but you've paid £120K cash.

So you reclaim the £70k you overpaid and lose the tax relief you were given on the £70k.

Edit - You have 7 years after the over payment in which to do this I believe, I don't know how they work out exactly how much tax relief to pay back as presumably there must be some interest as well if it's been a few years.

Edit2 - So you have paid £50k net and have no extra tax to pay