Tax and Pensions

Yes, but you can also decide after the end of the year how much you wish to contribute for the year in question. Don't ignore benefits in kind, if you get any. The IR would give you a refund after you do a self-assessment on any tax overpaid.

Yes, but don't pay into a pension purely for tax reasons.

Thanks for your reply Terry. I'm not clear on what you mean by self-assessment as I'm PAYE. Is this similar to applying for a Tax rebate? I noticed on your website that you used to work for Turner Bros. Isn't this the company that is having difficulties with its pension scheme? I feel sorry for those affected, hope you are not one of them.

Thanks for your reply Jonathon. It is not only for tax reasons. I am 44 and I have one company pension that was frozen (until I'm 60) after 15 years employment when I was made redundant eleven years ago. Apart from that I have a couple of very small pensions (and I mean small) therefore my thinking was to put as much as can away for my retirement whilst saving a bit of tax in the process if this makes sense.

BTW I have also paid full stamp (for 28 yrs) since I started work at 16 years old. However, from what I can gather the State pension is unlikely to be worth much by the time I receive it. I have also seen reports that the government would like us to work until 70 before getting our state pensions!!

In message , Mick writes

You are confusing 'pensions' (which, in my view are all useless) with 'post retirement financial planning'. The two are NOT synonymous.

DONT put another bean into a formal pension. Look at investing in Unit Trust and equities and cash etc., or whatever you would have had in your chosen pension but use other wrappers such as ISAs or invest directly. No tax relief on the way in, admittedly, but FAR more tax friendly on the way out and a far better range of funds to choose from.

Buy the contents of a wrapper, not the wrapper itself.

In general, if you have any income apart from that on which PAYE is levied, or pay into a personal pension scheme, or have other things which the tax man needs to or ought to know, then you are likely to fill in a self-assessment form after the end of the tax year. Asking for a tax refund is different, but may end up with the same result.

Fortunately I withdrew my pension contributions when I left in 1968. Had I left them, I would have been drawing the pension, small as it would have been, for almost 10 years now:-)

In message , Timothy Lee writes

You are right, "all" is the wrong word. Most occupational defined benefit schemes are OK. and as you say, Immediate vesting is OK as well, (in the right circs)