Help. Pension Contribution Question.

[judas]

Not exactly click bait I know but was hoping a fellow netter may be able to assist.

I have 2 pensions.

One matures at 55 yo and one at 67 yo.

Pension 1 is a personal one I took out 20 odd years ago and put sweeties into.

Pension 2 is our company group pension.

If a wanted to salary sacrifice and have some of that placed into the pension 1 and some into pension 2 would that be legally permissible and lower my taxable income?

I ask because I’m not sure I will make it to 67 under current stresses.

[RyeSloan]

Not exactly click bait I know but was hoping a fellow netter may be able to assist.

I have 2 pensions.

One matures at 55 yo and one at 67 yo.

Pension 1 is a personal one I took out 20 odd years ago and put sweeties into.

Pension 2 is our company group pension.

If a wanted to salary sacrifice and have some of that placed into the pension 1 and some into pension 2 would that be legally permissible and lower my taxable income?

I ask because I’m not sure I will make it to 67 under current stresses.

My understanding is as follows...heavily caveated with the fact that it’s just my opinion and not from anyone qualified to give pension financial advice!

Legally you can contribute to any pension you want. The particulars of your current company scheme may not allow salary sacrifice into anything but their scheme though, often that’s the case if the company contributes on your behalf or matches some or all of your contribution. You would need to check the particulars with your company or the scheme trustee.

In situations where the company contributes on your behalf it’s sometimes possible to forgo that and get it added direct to your salary (normally a lesser percentage though).

If that’s the case you could then add that to pension 1 (if that scheme allows you to still contribute to it) or indeed you could apply it to a SIPP and gain the tax relief on it that way.

And also just because Pension 2 has a maturity date of 67 doesn’t automatically mean you can’t access it early. Again depends on the type and particulars and their may well be implications in terms of value but it should be possible.

DC and DB pensions also work differently so it may also depends on what type of pension you have.

Finally your Pension 1 scheme may say 55 as the date but effectively that’s just the state pension age less 10 years (the earliest date anyone can access any pension). Worth checking what your state pension age is as it’s changed a lot recently and is currently tapering up to 67. There is a handy wee table here to tell you what it will be:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/310231/spa-timetable.pdf


So in my humble opinion there is no straight answer here (there rarely is when it comes to pensions!) and you will need to engage with your company, the relevant schemes and maybe take some financial advice...

[pollution]

Not exactly click bait I know but was hoping a fellow netter may be able to assist.

I have 2 pensions.

One matures at 55 yo and one at 67 yo.

Pension 1 is a personal one I took out 20 odd years ago and put sweeties into.

Pension 2 is our company group pension.

If a wanted to salary sacrifice and have some of that placed into the pension 1 and some into pension 2 would that be legally permissible and lower my taxable income?

I ask because I’m not sure I will make it to 67 under current stresses.

Firstly, what age are you?

[judas]

Firstly, what age are you?

47

[judas]

My understanding is as follows...heavily caveated with the fact that it’s just my opinion and not from anyone qualified to give pension financial advice!

Legally you can contribute to any pension you want. The particulars of your current company scheme may not allow salary sacrifice into anything but their scheme though, often that’s the case if the company contributes on your behalf or matches some or all of your contribution. You would need to check the particulars with your company or the scheme trustee.

In situations where the company contributes on your behalf it’s sometimes possible to forgo that and get it added direct to your salary (normally a lesser percentage though).

If that’s the case you could then add that to pension 1 (if that scheme allows you to still contribute to it) or indeed you could apply it to a SIPP and gain the tax relief on it that way.

And also just because Pension 2 has a maturity date of 67 doesn’t automatically mean you can’t access it early. Again depends on the type and particulars and their may well be implications in terms of value but it should be possible.

DC and DB pensions also work differently so it may also depends on what type of pension you have.

Finally your Pension 1 scheme may say 55 as the date but effectively that’s just the state pension age less 10 years (the earliest date anyone can access any pension). Worth checking what your state pension age is as it’s changed a lot recently and is currently tapering up to 67. There is a handy wee table here to tell you what it will be:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/310231/spa-timetable.pdf


So in my humble opinion there is no straight answer here (there rarely is when it comes to pensions!) and you will need to engage with your company, the relevant schemes and maybe take some financial advice...

Many thanks for your assistance sir 👍🇳🇬

[Rocky]

It's a long time since I worked in pensions but I don't think you need to do it via salary sacrifice in order to get tax relief / reduce taxable income. Used to be that when contributing to a personal pension you'd get the contribution grossed up by the pension company at basic rate (eg you pay £80 and it gets grossed up to £100) then you could claim higher rate relief via tax return.