Pension contributions from gov't

[JulianPH]

Joscal said:

Apologies if this is a slight derail but I currently pay into a Ssas assuming this is the most efficient way but this thread has made me think maybe it’s not?

Any advice greatly appreciated as I find pensions pretty baffling..

The tax treatment for personal contributions into a SSAS is the same.

I assume you have your own company though and use your SSAS for this, in which case gross company contributions are likely to be even more tax efficient.

[Joscal]

JulianPH said:

The tax treatment for personal contributions into a SSAS is the same.

I assume you have your own company though and use your SSAS for this, in which case gross company contributions are likely to be even more tax efficient.

Yes Julian my own company, I find it difficult to get unbiased advice as most seem to have hidden agendas. Thanks very much indeed.

[Jockman]

Joscal said:

JulianPH said:

The tax treatment for personal contributions into a SSAS is the same.

I assume you have your own company though and use your SSAS for this, in which case gross company contributions are likely to be even more tax efficient.

Yes Julian my own company, I find it difficult to get unbiased advice as most seem to have hidden agendas. Thanks very much indeed.

Keep using the SSAS and make max employer contributions.

We used to run a SSAS and used it for a loan to finance a move to our new premises in 2001. I did my own accounts and the notional earmarking of the family pots was useful when my parents came to retirement.

We then moved to Personal pensions then ultimately to SIPPS.

[JulianPH]

Joscal said:

JulianPH said:

The tax treatment for personal contributions into a SSAS is the same.

I assume you have your own company though and use your SSAS for this, in which case gross company contributions are likely to be even more tax efficient.

Yes Julian my own company, I find it difficult to get unbiased advice as most seem to have hidden agendas. Thanks very much indeed.

You should be able to get unbiased advice now commission has been removed, but you would likely be charged a lot of money for it if your SSAS has significant assets.

Equally, unless you are using the full functionality of your SSAS then a SIPP may also be more cost effective.

Having said that, if you are happy with the cost/service and require SSAS functionality then stay as you are!

Jockman has experience with both options so I would take on board what he has to say.

[Joscal]

Thanks Jockman I'm on the right track at least. Why did you move to personal pensions then SIPPS if you don't mind me asking?

[PostHeads123]

Also anything you pay into pension will be factored in for a number of different benefit thresholds like the extra 15hrs on top of the universal free 15hrs for childcare and other things, etc. So income - your pension contribution will be your income to consider for the threshold.

[Jockman]

Joscal said:

Thanks Jockman I'm on the right track at least. Why did you move to personal pensions then SIPPS if you don't mind me asking?

No problem. The SSAS had pretty much run its course once retirement was on the horizon and a loan was in place. No future loans were anticipated. A good pension vehicle but no longer appropriate to our profiles.

A few years of PP then an opportunity to invest in our own commercial property led us to 3 SIPPs under a common umbrella currently run by Suffolk Life but in the process of moving to a more dynamic organisation.

The maths worked out that we only needed circa 50% of pension funds to flip the commercial property into the SIPPs, taking advantage of contribution gaps in previous years. This is more difficult now due to tapering of the annual allowance.

[Joscal]

Ah makes sense now Jockman, retirement isn't quite on the horizon for me yet...Cheers!

[Jockman]

Whoops, sorry. Retirement was for my parents. I’m still a young stallion.

Sort of.

[Joscal]

Ha don't worry and sorry for aging you! Obviously all circumstances are different so as long as the ssas is ok for now I'm happy.
I'm sure the goalposts will move many times before we can access it anyway..

[Jockman]

Joscal said:

Ha don't worry and sorry for aging you! Obviously all circumstances are different so as long as the ssas is ok for now I'm happy.
I'm sure the goalposts will move many times before we can access it anyway..

Cheers. SSAS tells me you’re thinking seriously about your future. Great vehicle. Bear in mind you will change as a person over time and your investment strategy will also change.

All the best.

[PurpleMoonlight]

SSAS's rock ...

[Joscal]

Jockman said:

Cheers. SSAS tells me you’re thinking seriously about your future. Great vehicle. Bear in mind you will change as a person over time and your investment strategy will also change.

All the best.

Thanks Jockman. I'm already changing, I've ditched the flash cars and am putting the money into my pension instead. If only I could get back all the money I've spunked!!! It will be worth it in the long run (as long as I make it that far!)

All the best to you too.

[bony_13]

I don't feel it's worth starting a new thread, so will add my situation and question here if ok:

- Employed through my own Ltd company.
- Salary up to tax free allowance, dividends for the rest.
- Turnover ~£90k per anum.
- 33yo

My plan is to start a company pension, I'm looking to invest £1k/month into Vanguard Target Retirement 2050 Fund directly funded by the Ltd company. Is this the best strategy? From reading this thread it sounds to be better than me taking on a personal personal pension. Also any thoughts on these Vanguard products?

Apologies in advance that I'm sure this covers the same ground as this, and many previous threads....just seeking some personal assurance!

[Jockman]

bony_13 said:

I don't feel it's worth starting a new thread, so will add my situation and question here if ok:

- Employed through my own Ltd company.
- Salary up to tax free allowance, dividends for the rest.
- Turnover ~£90k per anum.
- 33yo

My plan is to start a company pension, I'm looking to invest £1k/month into Vanguard Target Retirement 2050 Fund directly funded by the Ltd company. Is this the best strategy? From reading this thread it sounds to be better than me taking on a personal personal pension. Also any thoughts on these Vanguard products?

Apologies in advance that I'm sure this covers the same ground as this, and many previous threads....just seeking some personal assurance!

You could do salary up to NI threshold of £8,464 if you like but there is a calculation to say that you are being more efficient at the tax free allowance.

Employer contributions are best, last time I looked at the marginal calculation.

You can set up a PP or go for a very competitive SIPP which will allow you more functionality.

I won’t advise on the choice of fund as I have no experience in that area.

[JulianPH]

bony_13 said:

I don't feel it's worth starting a new thread, so will add my situation and question here if ok:

- Employed through my own Ltd company.
- Salary up to tax free allowance, dividends for the rest.
- Turnover ~£90k per anum.
- 33yo

My plan is to start a company pension, I'm looking to invest £1k/month into Vanguard Target Retirement 2050 Fund directly funded by the Ltd company. Is this the best strategy? From reading this thread it sounds to be better than me taking on a personal personal pension. Also any thoughts on these Vanguard products?

Apologies in advance that I'm sure this covers the same ground as this, and many previous threads....just seeking some personal assurance!

It is likely your only strategy as dividend income is not classed as Net Relevant Earnings (NRE) for pension contribution purposes.

Happily, it is also your best strategy as the contributions are made gross, have no NI deductions and can be offset against corporation tax.

So it is win win from a tax perspective.

Vanguard is a very sensible low cost option. The fund you are looking at is a target dated one (so risk/reward is managed down the closer you get to 2050 - your 'target date'). If you want to draw down an income in retirement (rather than buy an annuity) then ten years before your target date you may need to review the asset allocation to ensure it can provide returns to support this income.

That is obviously a long way away though!

Well done on achieving what you have to date and being serious about using this to plan for your future.

[bony_13]

@ Jockman – thanks I will have a look at a few other SIPP’s and see what the pros and cons are.

@ Julian – thanks for you kind works and your valued input on these threads. I work hard but also feel very fortunate. My game plan is to clear off the mortgage early AND have a decent amount for a comfortable retirement that doesn’t start in my70’s!

[JulianPH]

bony_13 said:

@ Jockman – thanks I will have a look at a few other SIPP’s and see what the pros and cons are.

@ Julian – thanks for you kind works and your valued input on these threads. I work hard but also feel very fortunate. My game plan is to clear off the mortgage early AND have a decent amount for a comfortable retirement that doesn’t start in my70’s!

No problem and very nice of you to say.

You are obviously planning well and ahead of the curve so I have no doubt you will achieve this. Anything else just give me a shout (here or via PM if you prefer).