one off avc

[silver_fox]

has anyone requested a one off payment into their pension ?
how much notice do you need to give?

[RobertT]

You used to be able to pay AVC's by cheque, but that was stopped a couple of years ago. You can now only pay via your wages.

You'd have to contact payroll and pensions to ensure the payment was made when you want it to be.

[silver_fox]

cheers Robert , if i ring tomorrow could i make a payment for next weeks payslip or do you have to fill the form in each time

[RobertT]

Next week is probably too soon, but why not just set up a regular payment each week. It's much easier than ad hoc amounts every now and then.

Assuming your a member of the RMPP, look in the media library of the plan website for the forms.

[silver_fox]

its the rmdcp im in

[RobertT]

Go to Useful Documents on https://rmdcp.uk

[Decky Boy]

You also need to consider how much you are paying in each week otherwise you will miss out on the full benefits of the Salary Sacrifice Scheme ( ie you will not get NI relief on your payment(s) ! Pay in under the threshold amount and each £100 invested costs you just £68.

I pay in just over £100 a week from wages and benefit fully through the Salary Sacrifice Scheme.

Another quandary you may have is desciiding which fund or funds to invest in. I recently moved out of the Growth Fund and diversified over 3 other funds. There's a lot of uncertainty in the markets at the moment with many pundits suggesting the bubble in equities is about to burst ! If you are not heavily into equities any pullback may be a good time to enter the market though conversely if you are heavily invested in stocks any major pullback will likely hit your nvestments hard ???

Who knows what's around the corner...

[silver_fox]

to get started i rang the helpline and paid £200 which woll continue unless i call again and change it. the lady said you need to call before friday lunchtime to apply to the next week payslip. you are allowed to pay up to 85%.
my question is does paying £200 in one week mean i have put myself below the minimum wage and affects national insurance? is this a weekly thing or averaged out over a longer term?

[heapsy]

Short answer is yes, it's a weekly thing. I was paying £130.88 at one point and fell out of PSE. I reduced my payment to £100.88 to stay within PSE. I've just sent off a form to increase this by £2 per week, to reflect the increase in our basic pay from April. Any more could be an issue, because the National Minimum Wage is due to increase from £8.72 per hour to £8.91, an increase of just under 2.18%. You cannot include allowances to calculate what you can pay into AVCs. It should only be based on your contracted hours pay. Deduct your AVC payment from your basic wage, then divide that by your contracted hours. If it falls below the National Minimum Wage, you will lose the PSE benefit.

[RobertT]

to get started i rang the helpline and paid £200 which woll continue unless i call again and change it. the lady said you need to call before friday lunchtime to apply to the next week payslip. you are allowed to pay up to 85%.
my question is does paying £200 in one week mean i have put myself below the minimum wage and affects national insurance? is this a weekly thing or averaged out over a longer term?

The limit for a full timer to stay below the minimum wage and benefit from PSE is AVC's in the region of £100 or so per week, so you're obviously well over that!
A subject that's been covered many times on these forums.

In practice your £200 gross is costing you £160 when taking tax relief into account – your income tax bill should reduce by £40.

But if you were paying in £100 gross per week that would only be costing you £68 when also getting the benefit of PSE.

So not sticking within the PSE limits means your contributions are costing you more than they need to.

The benefit of PSE is worked out on a weekly basis, so the sooner you knock it down, the more tax efficient your AVC's will become.

[Schiff]

In practice your £200 gross is costing you £160 when taking tax relief into account – your income tax bill should reduce by £40.

But if you were paying in £100 gross per week that would only be costing you £68 when also getting the benefit of PSE.

So not sticking within the PSE limits means your contributions are costing you more than they need to.

The benefit of PSE is worked out on a weekly basis, so the sooner you knock it down, the more tax efficient your AVC's will become.

If someone is really wanting to build their pension pot rapidly then there is nothing to stop them paying £100 per week extra into the Royal Mail scheme and, at the same time paying another £100 or more per week into a separate pension scheme outside of RM.

If silver_fox is happy to pay £160 net into pensions weekly then that could be £100 gross, £68 net into the RM scheme via payroll and then £115 gross, £92 net into a SIPP. That would increase his pension savings by an extra £15 per week more than he is currently getting, all courtesy of the taxman.

[RobertT]

Yes, there is nothing stopping you from paying into more than one pension.

The AVC route is the most tax efficient going in because of the added benefit of PSE, but obviously has limits.

The maximum amount you can pay into pensions and benefit from tax relief is 100% of earnings up to a maximum wage of £40k.
So an additional personal pension would be a wise move, once the PSE limit has been reached on RM pension contributions.

[freespeech]

Yes, there is nothing stopping you from paying into more than one pension.

The AVC route is the most tax efficient going in because of the added benefit of PSE, but obviously has limits.

The maximum amount you can pay into pensions and benefit from tax relief is 100% of earnings up to a maximum wage of £40k.
So an additional personal pension would be a wise move, once the PSE limit has been reached on RM pension contributions.

......and I'm pretty sure that £40k limit includes the employer contribution too.

[Dorset Plodder]

Yes, there is nothing stopping you from paying into more than one pension.

The AVC route is the most tax efficient going in because of the added benefit of PSE, but obviously has limits.

The maximum amount you can pay into pensions and benefit from tax relief is 100% of earnings up to a maximum wage of £40k.
So an additional personal pension would be a wise move, once the PSE limit has been reached on RM pension contributions.

I wish I'd gone down the AVC route years ago .... but I didn't even have a decent PC then, and I'd never heard of RMC!

Instead I started putting about £100 a month into a PPP (it was index linked at 2.5%ish).... I'm not as pension savvy as some contributors.

At the time my main concern was to have a seperate nest egg that the Missus didn't know about (we were going through one of those Bad Marriage times ... PS we're still together) Also I basically didn't trust RM, and didn't want all my eggs in one basket. We all know what happens when people like Philip Green & Robert Maxwell are in charge.

I reckon I've probably got another 7 or 8 years to push. Gut Feeling says "Leave it where it is" (I've been paying in about 14 years), but would there be any advantage with these new RM pensions to moving it across (that's if it's possible)?

[silver_fox]

so if i rang up next week and changed it to £100 i would automatically get the pse benefit?

is it clear when reading your payslip if you are achieving a 68p to £1 gain or an 80p to £1 gain?