LISA or Pension - Tax relief
Discussion
I'm thinking to start making use of open and unused LISA but would like my calculations sense checking.
£100 investment
LISA - taking an overall rate of 30%, I'd need to earn gross £143 to net £100.
£100 + 25% bonus = £125.
I can withdraw at 60, tax free so end up with £125.
Works pension, easy and taken from source.
AVC - Take the same earning gross £143 goes in, No 40% on this but I think still pay NI.
On withdrawal I'm paying 20%, less personal allowance, and I think no NI. So say 15% (£21), so end up with £122.
Slightly more complicated as I think my AVC is split with a DB bump as well as tax free lump sum. Not sure the conversion rate but 35.1 seems familiar.
Just taking account of the uplifts and tax relief, £125 or £122, it's much of a muchness if I've calculated it right.
Keeping the LISA does allow me some cash at 60 if the very unlikely event I don't want to take my pension and carry on working.
Nowhere near lifetime allowance.
Anything else to consider?
£100 investment
LISA - taking an overall rate of 30%, I'd need to earn gross £143 to net £100.
£100 + 25% bonus = £125.
I can withdraw at 60, tax free so end up with £125.
Works pension, easy and taken from source.
AVC - Take the same earning gross £143 goes in, No 40% on this but I think still pay NI.
On withdrawal I'm paying 20%, less personal allowance, and I think no NI. So say 15% (£21), so end up with £122.
Slightly more complicated as I think my AVC is split with a DB bump as well as tax free lump sum. Not sure the conversion rate but 35.1 seems familiar.
Just taking account of the uplifts and tax relief, £125 or £122, it's much of a muchness if I've calculated it right.
Keeping the LISA does allow me some cash at 60 if the very unlikely event I don't want to take my pension and carry on working.
Nowhere near lifetime allowance.
Anything else to consider?
Ahh yes ok. Slightly different with my DB, AVC split but if we take 25% of 143 being 35 leaves 108. 15% off that leaves 92 plus the TFLS comes out at £127.
Again, not massively different. I like the idea of a separate pot , just wanted to make sure I wasn't calculating it incorrectly.
I've only 8 years to pay into LISA so won't me a massive amount anyway. I wish I had the advice, and the spare cash a few years back!
Again, not massively different. I like the idea of a separate pot , just wanted to make sure I wasn't calculating it incorrectly.
I've only 8 years to pay into LISA so won't me a massive amount anyway. I wish I had the advice, and the spare cash a few years back!
Edited by Rick101 on Sunday 1st January 09:28
Gassing Station | Finance | Top of Page | What's New | My Stuff