Pension query, again
Discussion
Hi, Can anyone shed any light on the best way to add value to my pension using AVCs.
I currently pay into my workplace pension the full amount I can which is 5% of my basic earnings. Any on call, overtime, bonus paid is not included in that 5% so it remains a static amount throughout the year. This is the maximum the workplace pension will allow. My employer pays in 10% again, the maximum they offer.
I also pay into my own SIPP a varied amount monthly depending on what’s left after bills and savings are taken out. This is with Hargreaves Lansdown and as a result of paying into a SIPP you automcatically get back 20% of your investment and my salary is such that I can claim 40% back in total.
My question is should I pay additional AVCs with work (they will not match my additional pension deposits) or should I instead pay more money into my SIPP. I don’t know when the AVCs normally get taken out of the my wages, I assume its before tax (or is it after). Would it be better to not pay AVCs and then instead use my wages (after its been taxed) and pay into the SIPP and get the tax back?
Im not talking huge sums in terms of AVCs but just wondered if its better to do it from my salary and pay into the workplace pension or allow it to be taxed, arrive in my bank and then pay into my SIPP. Does that make sense?! Thanks
I currently pay into my workplace pension the full amount I can which is 5% of my basic earnings. Any on call, overtime, bonus paid is not included in that 5% so it remains a static amount throughout the year. This is the maximum the workplace pension will allow. My employer pays in 10% again, the maximum they offer.
I also pay into my own SIPP a varied amount monthly depending on what’s left after bills and savings are taken out. This is with Hargreaves Lansdown and as a result of paying into a SIPP you automcatically get back 20% of your investment and my salary is such that I can claim 40% back in total.
My question is should I pay additional AVCs with work (they will not match my additional pension deposits) or should I instead pay more money into my SIPP. I don’t know when the AVCs normally get taken out of the my wages, I assume its before tax (or is it after). Would it be better to not pay AVCs and then instead use my wages (after its been taxed) and pay into the SIPP and get the tax back?
Im not talking huge sums in terms of AVCs but just wondered if its better to do it from my salary and pay into the workplace pension or allow it to be taxed, arrive in my bank and then pay into my SIPP. Does that make sense?! Thanks
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