6:30 I appear to be able to change this and it takes 2 months to take effect. Over past 18months, I have increased from 5% to 40% in a few steps to get to where I’m comfortable.
Hi Pete - great video. You may know that there is a limit to how much salary sacrifice you can do, so that it doesn't take your reduced below the National Minimum Wage. But do you know whether this threshold must be met on any singular month basis or whether it can be met overall on an annual basis? The reason I ask is that, for this tax year, I have already comfortably exceeded the National Minimum Wage level. So can I theoretically sacrifice, say, 90% of my salary to my workplace pension for the rest of this tax year safe in the knowledge that I have already exceeded the National Minimum Wage threshold? Sacrificing 90% of my salary would take me below the National Minimum Wage on a singular month basis, but, looked at annually over the course of the entire tax year, I have already comfortably exceeded the National Minimum Wage threshold - hence my question. Finally, do annual bonus amounts count towards meeting the National Minimum Wage thresholds?
I'm a higher rate tax payer but ive just found out that HMRC have only been putting in 20% tax relief into my pension. I dont need to do a tax self assessment so how do i got about getting that extra 20%? What info do I need to collate in advance?
I’m guessing you must be employed, but making contributions from your net income then? In which case you’ll need to do a tax return, probably just a short form one, to get the tax relief. It’s easy enough, but you’ll need to register for a Government Gateway ID and add Self-Assessment as a service on the HMRC website. Then you’ll just need your P60 earnings and the amount that you have out into a pension. Consider an app such as TaxCalc. I’ve used it for years, it’s super-cheap but handles everything for you.
Paying salary sacrifice as part of auto enrolled pension. Legal and general says I don’t get tax relief because my employer sends my contributions in one go
If you’re salary sacrificing, you’re earning less, and hence paying less tax. So in the end it’s the same thing. If you think about it, if you earned £100, you’d pay £20 or £40 tax on it. As you have sacrificed it into your pension, then you haven’t had to pay that tax, and the full £100 goes in. So I’m a sense you are still getting the benefit of tax relief. Bud L&G are technically right because under salary sacrifice it’s your employee making the payment not you. This way though, you also save NI, so keep going!
I'm a higher rate tax payer on an auto enrolled company pension with salary sacrifice. I'm unclear as to whether i have to do anything to get the full tax relief, I've never done a tax self assessment before
You don’t need to. Because your pension payments are taken through payroll, you get the relief at source. Essentially you get your gross salary, the pension payment is taken off, and then you’re taxed on the rest. You’re already getting the full relief, didn’t worry 👍🏻
Can I ask with salary sacrifice , if the pension technically belongs to my employer , can I also invest single payments into the pension and if so would I still receive the tax free top up?
Excellent video and of high interest. I'm in a salary sacrifice scheme. However, my Company is unreliable. Is there I anything I can do to do a basic check to see if they have made the right deductions/contributions using my payslips or P60.
Thanks, this is so helpful! Can you point me to another of your videos (or maybe share your thoughts) for the scenario where earnings are say £115k p/a - with the loss of personal allowance >£100k I am wondering if paying more into my pension would help and if so what considerations should I...erm, consider?
I have a question about SIPP salary sacrifice. Dose this only work off your set salary/normal working hours? I'm paid hourly by my employer full time Monday-Friday but I have the opportunity to earn a lot more money working overtime. The thing is, with my normal working hours I don't earn enough to contribute to my SIPP as I'm already maxing out my SSI & LISA each month and the only way I can earn enough to add to my SIPP is to work overtime, the extra money I earn from Overtime can vary...
You’re unlikely to be able to salary sacrifice variable overtime. SalSac involves a contractual reduction in your pay in return for higher employer contribution into your pension. You can still contribute, but not via SalSac. Suggest when you get paid with overtime you decide how much you’re going to contribute then.
Thanks for the great video. Is the tax relief from paying into a SIPP any better or worse and doing salary sacrifice for someone over the 100k threshold?
Hi Pete, a quick question. When I do salary sacrifice with my work pension what is the minimum amount I need to pay (NI) to qualify for a full year’s contribution?
Hello Am in receipt of NHS pension ie final salary pension. (1) Am I allowed by HMRC rules to do salary sacrifice and contribute through my new employers the maximum 40k (2) Money purchase annual allowance? Will this reduce my annual allowance, is salary sacrifice affected by this money purchase annual allowance? Thank you
Hi there 1) You can continue to contribute up to the annual allowance which is £40k or 100% of your salary, whichever is LOWER. 2) The MPAA is not triggered if you've taken DB benefits, only if you've taken income from a DC pension Good luck!
No better time to start than now, Harry. Also, your pension access age won’t be 55, more likely 58 or maybe even 59. Whatever your state pension age is, take ten years off it.
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6:30 I appear to be able to change this and it takes 2 months to take effect. Over past 18months, I have increased from 5% to 40% in a few steps to get to where I’m comfortable.
Hi Pete - great video. You may know that there is a limit to how much salary sacrifice you can do, so that it doesn't take your reduced below the National Minimum Wage. But do you know whether this threshold must be met on any singular month basis or whether it can be met overall on an annual basis? The reason I ask is that, for this tax year, I have already comfortably exceeded the National Minimum Wage level. So can I theoretically sacrifice, say, 90% of my salary to my workplace pension for the rest of this tax year safe in the knowledge that I have already exceeded the National Minimum Wage threshold? Sacrificing 90% of my salary would take me below the National Minimum Wage on a singular month basis, but, looked at annually over the course of the entire tax year, I have already comfortably exceeded the National Minimum Wage threshold - hence my question. Finally, do annual bonus amounts count towards meeting the National Minimum Wage thresholds?
Great content and very helpful
Your videos are great. Appreciate it
Thank you!
I'm a higher rate tax payer but ive just found out that HMRC have only been putting in 20% tax relief into my pension. I dont need to do a tax self assessment so how do i got about getting that extra 20%? What info do I need to collate in advance?
I’m guessing you must be employed, but making contributions from your net income then? In which case you’ll need to do a tax return, probably just a short form one, to get the tax relief. It’s easy enough, but you’ll need to register for a Government Gateway ID and add Self-Assessment as a service on the HMRC website. Then you’ll just need your P60 earnings and the amount that you have out into a pension.
Consider an app such as TaxCalc. I’ve used it for years, it’s super-cheap but handles everything for you.
Paying salary sacrifice as part of auto enrolled pension.
Legal and general says I don’t get tax relief because my employer sends my contributions in one go
If you’re salary sacrificing, you’re earning less, and hence paying less tax. So in the end it’s the same thing. If you think about it, if you earned £100, you’d pay £20 or £40 tax on it. As you have sacrificed it into your pension, then you haven’t had to pay that tax, and the full £100 goes in. So I’m a sense you are still getting the benefit of tax relief. Bud L&G are technically right because under salary sacrifice it’s your employee making the payment not you. This way though, you also save NI, so keep going!
Hello again
Thank you for the reply
Less tax = tax relief to my contribution.
I get it now
Could you pay a lump sum to an AVC in March and the tax and NI would be claimed back and put in the AVC pot?
I'm a higher rate tax payer on an auto enrolled company pension with salary sacrifice. I'm unclear as to whether i have to do anything to get the full tax relief, I've never done a tax self assessment before
You don’t need to. Because your pension payments are taken through payroll, you get the relief at source. Essentially you get your gross salary, the pension payment is taken off, and then you’re taxed on the rest. You’re already getting the full relief, didn’t worry 👍🏻
Can I ask with salary sacrifice , if the pension technically belongs to my employer , can I also invest single payments into the pension and if so would I still receive the tax free top up?
As a higher rate taxpayer should i do salary sacrifice or make personal pension contributions, or do they have the same net impact
Worth considering SS if your employer will
Contribute their NI saving into your pension. Otherwise it’ll be largely a similar outcome.
Excellent video and of high interest. I'm in a salary sacrifice scheme. However, my Company is unreliable. Is there I anything I can do to do a basic check to see if they have made the right deductions/contributions using my payslips or P60.
Thanks, this is so helpful!
Can you point me to another of your videos (or maybe share your thoughts) for the scenario where earnings are say £115k p/a - with the loss of personal allowance >£100k I am wondering if paying more into my pension would help and if so what considerations should I...erm, consider?
I have a question about SIPP salary sacrifice. Dose this only work off your set salary/normal working hours? I'm paid hourly by my employer full time Monday-Friday but I have the opportunity to earn a lot more money working overtime. The thing is, with my normal working hours I don't earn enough to contribute to my SIPP as I'm already maxing out my SSI & LISA each month and the only way I can earn enough to add to my SIPP is to work overtime, the extra money I earn from Overtime can vary...
You’re unlikely to be able to salary sacrifice variable overtime. SalSac involves a contractual reduction in your pay in return for higher employer contribution into your pension. You can still contribute, but not via SalSac. Suggest when you get paid with overtime you decide how much you’re going to contribute then.
@@MeaningfulMoney understand, thanks for the fast response!
Tax man is a person? You made me spit out my coffee hahahaa
Thanks for the great video. Is the tax relief from paying into a SIPP any better or worse and doing salary sacrifice for someone over the 100k threshold?
Would likely be worse. Salary sacrifice has other benefits, such as reducing the personal allowance taper over 100k and also employee NI savings
@@MeaningfulMoney Thanks 🙏
Hi Pete, a quick question. When I do salary sacrifice with my work pension what is the minimum amount I need to pay (NI) to qualify for a full year’s contribution?
You can salary sacrifice at any time and look at the lower earnings limit on the gov website. Earn above that and you should get NI credits
You need to earn £245 per week for a year to get a qualifying year for your state pension.
Hello
Am in receipt of NHS pension ie final salary pension.
(1) Am I allowed by HMRC rules to do salary sacrifice and contribute through my new employers the maximum 40k
(2) Money purchase annual allowance? Will this reduce my annual allowance, is salary sacrifice affected by this money purchase annual allowance?
Thank you
Hi there
1) You can continue to contribute up to the annual allowance which is £40k or 100% of your salary, whichever is LOWER.
2) The MPAA is not triggered if you've taken DB benefits, only if you've taken income from a DC pension
Good luck!
@@MeaningfulMoney Thank you very much for this excellent info.
im in my 20's earning 150k a year. I guess this is a good idea when im closer to my pension age of 55
No better time to start than now, Harry. Also, your pension access age won’t be 55, more likely 58 or maybe even 59. Whatever your state pension age is, take ten years off it.
@@MeaningfulMoney maybe a safe move but I want to enjoy / use that money now. I don't want to wait 30 years for it
Tax gender fluid non-binary being. Not a tax man. 😂
We're all government tax whores
Why on earth would anyone think giving up part of your salary is acceptable? Slavery was abolished 300 years ago, allegedly
It’s so it goes into your pension! You’re not giving it up, you’re redirecting it. Did you watch the video?!
@@MeaningfulMoneyvery doubtful he/she/it/they/them did .