Maximum PSE Payments

jetblack · Post by **jetblack** » 13 Aug 2017, 15:46

They said the funds used for the zurich lifestyle option were to change - in order for better growth + stability etc etc.

Post by **RobertT** » 13 Aug 2017, 15:49

The original DC proposal was that payments into the existing Bonusplan & Flexiplan would stop from 1st April 2018. With Flexiplan contributions being redirected into the DC scheme and Bonusplan stopping altogether.
Plus the balance of your AVC’s would not be affected and we will still be able to invest in the available funds until you take them out.

The second proposal hasn’t mentioned AVC’s at all as far as I’m aware. But as the Cash Balance scheme is designed to fund the cash free lump sum just like AVC’s are, in my opinion any additional contributions would probably go into that.
Or if you choose the DC option, they would go into that.

But as the CB/DC proposal is going to be a ‘new section of the plan’ with the LED staying for section C members, I think that gives hope that Bonusplan might remain.

But as been said many times, until we’re given any firm info, we can only guess.

The AVC letter that I assume we’re all going to get(those with AVC’s anyway), says they are altering the funds available for those choosing the Lifestyle option. There's no mention of whether we’ll be able to continue paying into them after 1st April 2018.

Hawkey99 · Post by **Hawkey99** » 13 Aug 2017, 15:54

Yes I had the letter.

Doesn't make any sense to send out such a letter if they intend on closing the schemes, considering the Pension schemes close in 6 months time.

Post by **RobertT** » 13 Aug 2017, 16:05

I would agree that it’s a bit confusing, and some people will probably read it differently from others. But for me it’s just saying that we are being given a different and hopefully better investment choice for our AVC funds(Lifestyle option). It doesn’t really imply anything else.

heapsy · Post by **heapsy** » 13 Aug 2017, 16:06

Hawkey99 wrote:Heapsy,

Can you share a bit more about what they said regarding AVCs.

Great news. Im surprised they haven't put it out in a document yet.

Thanks

Sure. If you are investing through the Lifestyle Option the fund will be replacing the Growth fund with the AVC Diversified Growth Fund. It is made up of 67% LGIM Dynamic Diversified Fund and 33% LGIM 30/70 Global Equity Index Fund. LG refers to Legal and General btw. Information can be found in the Zurich fund fact sheets. There is a slight increase in charges, from 0.35% to 0.59%. If you are unsure if this is suitable, contact pensions on 0114 241 4545. As yet, I haven't looked these funds up to compare their breakdown. Something I will be doing tomorrow morning, when Iv'e got time. (pre birthday curry tonight, big 50 tomorrow) I will be very interested myself to see what is going where. I'm using a different strategy for different AVCs (Lifestyle for Bonus Plan, self selection for Flexiplan). The lower risk fund used in the Lifestyle option is also being changed to the LGIM Investment Grade Corporate Bonds All Stocks Index Fund.
I've tried to keep this as brief as I can, the letter is 1 and a half A4 sheets. Quite clear, but a bit long winded to explain all here. Hope that helps.

heapsy · Post by **heapsy** » 13 Aug 2017, 16:08

RobertT wrote:I would agree that it’s a bit confusing, and some people will probably read it differently from others. But for me it’s just saying that we are being given a different and hopefully better investment choice for our AVC funds(Lifestyle option). It doesn’t really imply anything else.

Hopefully, it implies that they will continue with AVCs for a while at least.

mrcurve · Post by **mrcurve** » 14 Aug 2017, 00:09

You have to earn the minimum wage which is currently £7.50p

if you work the same job and hours every week then you can work out how much you can pay in by doing this.

use the ("assessable pay" bottom left of your payslip) you need two consecutive weeks, subtract the first week from the next week, then divide it by your hours.

example would be £6000 week 17 £6500 week 18, =£500 / 39 = £12.82

subtract the minimum wage £12.82-£7.50 = £5.32

then times this by your hours £5.32 x 39 = 207.48

foxyjarvis · Post by **foxyjarvis** » 14 Aug 2017, 09:11

My wage slip
Basic 39hours £517.19
Del. Supplement £23.96
PSE Adj RMPP C -£27.16
PSE C Flexi Cash -£220.00
Gross £293.99
Tax £13.80
NIC £16.44
39×£7.50=£292.50
So, I am £1.49 from crossing the threshold at which NIC's are adversely affected. It's worth doing!

Post by **Aquarius** » 14 Aug 2017, 15:45

heapsy wrote:
dandydon wrote:
foxyjarvis wrote:I spent a few months doing the Hokey Cokey on this one with Sheffield. I believe the £7.20 figure has been revised upwards. I'm in London and pay £220 p/w into an AVC which I think is right on the limit for maximising tax and N.I returns. Don't ring Sheffield for advice, they're useless!
I was wondering what the limit was myself - i am full time 39 hours and paying £100pw into flexiplan...will be increasing that in the near future.

I agree about Sheffield - i have sent them a couple of emails asking a simple question...all i got was a rather cold condescending reply and "do it yourself" answer.

Totally useless
Are you sure you are still within PSE limits? I was paying a total of £132.88, but kept dropping out of PSE, which meant getting hammered on NI payments. I dropped the payments to current levels to avoid this.

I am assuming you weren't asking me that question ?

As i understand it i should be able to increase my contributions another £20-30pw - i think ? - maybie wrongly

Ok looking at other posts it seems i can increase my contributions significantly - interesting.

Hawkey99 · Post by **Hawkey99** » 14 Aug 2017, 17:30

Where does the £7.50 figure come from ??

heapsy · Post by **heapsy** » 14 Aug 2017, 17:34

dandydon wrote:
heapsy wrote:
dandydon wrote:
foxyjarvis wrote:I spent a few months doing the Hokey Cokey on this one with Sheffield. I believe the £7.20 figure has been revised upwards. I'm in London and pay £220 p/w into an AVC which I think is right on the limit for maximising tax and N.I returns. Don't ring Sheffield for advice, they're useless!
I was wondering what the limit was myself - i am full time 39 hours and paying £100pw into flexiplan...will be increasing that in the near future.

I agree about Sheffield - i have sent them a couple of emails asking a simple question...all i got was a rather cold condescending reply and "do it yourself" answer.

Totally useless
Are you sure you are still within PSE limits? I was paying a total of £132.88, but kept dropping out of PSE, which meant getting hammered on NI payments. I dropped the payments to current levels to avoid this.
I am assuming you weren't asking me that question ?

As i understand it i should be able to increase my contributions another £20-30pw - i think ? - maybie wrongly

Ok looking at other posts it seems i can increase my contributions significantly - interesting.

According to recent posts, you must stay within the limits (mustn't drop bellow £7.50 per contracted hour, that's the minimum wage figure) AFTER payments are made to AVCs. Failure to do that means dropping out of PSE. This in turn will cost you more by way of NI contributions.
This happened to me on 3 separate occasions. I had to reduce payment to stay within the figure quoted. You can pay more in to AVCs, but don't get the benefit of PSE.
To work it out, deduct your AVC contributions from you basic pay. DO NOT include delivery supplement or whatever allowances you get, they do not count towards basic pay for this purpose. So, for me, full time: £412.30 - £118.88 = £293.42
Divide £293.42 by 39 gives a figure of £7.52. Just above the minimum wage figure.

heapsy · Post by **heapsy** » 14 Aug 2017, 17:44

Hawkey99 wrote:Where does the £7.50 figure come from ??

Minimum wage. When I spoke to them, the pensions dept. told me it was £7.20. This has probably been revised upwards since then. I think a lot of confusion is caused by two factors, 1 What earnings are eligible for the calculation. I was told not to include delivery supplement for this. And 2 a general lack of knowledge at Sheffield. They, at one point, even referred me to payroll. They laughed at this, and told me it was pensions who would know. Very confusing, and quite off putting.

foxyjarvis · Post by **foxyjarvis** » 14 Aug 2017, 19:22

Heapsy, you do include delivery supplement, otherwise I'd be dropping out of PSE. I gain from this but it does seem unfair that people living in London getting £100 more in basic pay are able to supplement that by an extra £32 by putting it in an AVC.

heapsy · Post by **heapsy** » 14 Aug 2017, 20:17

foxyjarvis wrote:Heapsy, you do include delivery supplement, otherwise I'd be dropping out of PSE. I gain from this but it does seem unfair that people living in London getting £100 more in basic pay are able to supplement that by an extra £32 by putting it in an AVC.

Right, well that's me being told something different. I was told you didn't include it. Every time you ring pensions you get a different story. Might give them a bell this week and try to clarify.

Post by **Aquarius** » 21 Aug 2017, 15:24

heapsy wrote:
foxyjarvis wrote:Heapsy, you do include delivery supplement, otherwise I'd be dropping out of PSE. I gain from this but it does seem unfair that people living in London getting £100 more in basic pay are able to supplement that by an extra £32 by putting it in an AVC.
Right, well that's me being told something different. I was told you didn't include it. Every time you ring pensions you get a different story. Might give them a bell this week and try to clarify.

Did you find the answer to this - i receive a processing supplement so will give them a ring to see if i can get an answer to this question.