Two separate (but connected) questions. I'm 53 this year. Have only been in company pension since 2001 (Pension 1). Prior to that, had personal pension (Pension 2). Pension 2 was not transferrable when I started new job in 2000, so I froze it and entered Pension 1 as soon as I could, which was in 2001. Better late than never!
I'm contributing as much as I can with AVCs, bringing the total contribution (AVCs + Employee contribution) to 20%. At my age I could contribute 30% in AVCs and still get tax relief. Question 1: Should I up the AVC contribution to the max of 30% when I can afford it, which will be in May when my SSIA matures and I have spare money every month? Bear in mind that my tax rate is only 20% (I'm married, with husband's earnings being very low). It's difficult to know how beneficial it will prove to be (when I'm old!) to up my AVCs now.
Question 2: As I'm one of the 20% taxpayers, should I take advantage of the Govt's offer and put 7,500 of my SSIA into my pension as an AVC, thus getting a further top-up of 2,500 from the Government? From my reading (and I could be completely wrong) I will get 2,500 for my contribution of 7,500 but can NOT claim tax relief on the 7,500 AVC itself (on which one could normally claim tax relief). Is that correct?
Obviously I need a little clarity on these points. Many thanks to everybody who takes the time to read this.
I'm contributing as much as I can with AVCs, bringing the total contribution (AVCs + Employee contribution) to 20%. At my age I could contribute 30% in AVCs and still get tax relief. Question 1: Should I up the AVC contribution to the max of 30% when I can afford it, which will be in May when my SSIA matures and I have spare money every month? Bear in mind that my tax rate is only 20% (I'm married, with husband's earnings being very low). It's difficult to know how beneficial it will prove to be (when I'm old!) to up my AVCs now.
Question 2: As I'm one of the 20% taxpayers, should I take advantage of the Govt's offer and put 7,500 of my SSIA into my pension as an AVC, thus getting a further top-up of 2,500 from the Government? From my reading (and I could be completely wrong) I will get 2,500 for my contribution of 7,500 but can NOT claim tax relief on the 7,500 AVC itself (on which one could normally claim tax relief). Is that correct?
Obviously I need a little clarity on these points. Many thanks to everybody who takes the time to read this.