Umbrellas and Additional Contributions to Pension Schemes

[AlistairWilliams]

Hi,

I earnt over 100K last year, but was unaware that your personal allowance goes down by £1 for every £2 that my adjusted net income is above £100,000. Upshot is I was left with a £4K tax bill when I had submitted my tax return.

I have asked my Umbrella if I can pay into my Nest pension additional payment using their payroll, i.e. from source - as this would be tax efficient. But they have fixed contribution rates and they also do not allow additional voluntary payments.

I was wondering what people do in similar situations?

Thanks

Alistair

[eek]

Find a different umbrella and use salary sacrifice to keep what you earn below £100,000

[ladymuck]

Can you increase your fixed contribution to bring yourself under the 100k? Not as good as top ups but might be an option if your agency won't let you change brolly.

[Smartie]

You can make personal contributions to any pension scheme, such as a SIPP, entirely independently of your workplace pension and employer.
This is with income that's already been taxed however you can claim it back on your tax return.

While you don't get any NI benefit which is not much anyway for employee NI and many employers don't give you the employer NI back, at least you're not paying a marginal tax rate of 60%.

Bang in the full £60k (less your employment contributions) and make the most of it.

[lucyclarityumbrella]

If they are unable to adjust the pension for you, then you would have to make it personally and forfeit the NI reduction. If it relates to last year they wouldn't be able to do it either. Just for reference, if you can amend pensions with your umbrella, then always ask for a P11 towards the latter part of the tax year around Feb / March time, so you can look at potential predicted earnings for the year pre 5th April.