Max AVC contribution

[Hitcher]

How much can we put into the AVC before hitting the NMW limit?

Thanks.

[heapsy]

I'm paying 6%, which matches exactly the basic amount we pay. On top, I'm paying the 1% lump sum booster. I'm within PSE.. i did briefly pay 7% AVCs, for a few weeks, but with the NMW increasing, and still waiting for the pay rise, I dropped it back to 6%. Hope that helps.

[BenacreNick]

I chose £10 per week years ago, and then opted in for the 1% Lump Sum Booster as well, when that was available recently.

[NWpostie]

Before the Flexiplan stopped accepting payments, I was paying £110 a week without dropping out of PSE, I believe you could go up to £125 I choose not to, now I'm currently paying £60 a week into the CDC AVC and opted into the 1% lump sum booster, it's a no brainer.

I would also take out a Stocks & Shares ISA with a ready made portfolio to opt into, research which suits you best, all profits is free of tax, plan for 5 years minimum longer is better for greater returns.

[Hitcher]

I'm P/T and and currently paying £50/week but want to increase that to £75 to boost my lump sum but obviously don't want to hit the limit. If I go over do you see it move to the right side of your payslip?

[milly]

Before the Flexiplan stopped accepting payments, I was paying £110 a week without dropping out of PSE, I believe you could go up to £125 I choose not to, now I'm currently paying £60 a week into the CDC AVC and opted into the 1% lump sum booster, it's a no brainer.

I would also take out a Stocks & Shares ISA with a ready made portfolio to opt into, research which suits you best, all profits is free of tax, plan for 5 years minimum longer is better for greater returns.

Obviously its good to take advantage of the tax incentives with pensions, but I wouldn't recommend anyone under 50 going overboard with pension saving, especially if you want to retire early.
I can only see the government keep increasing the age you can access your own money.
S&S ISA's offer much more flexibility so long as you're not tempted to spend it.

[Hitcher]

Obviously its good to take advantage of the tax incentives with pensions, but I wouldn't recommend anyone under 50 going overboard with pension saving, especially if you want to retire early.
I can only see the government keep increasing the age you can access your own money.
S&S ISA's offer much more flexibility so long as you're not tempted to spend it.

I'm 60 next month and planning to retire at 65, so I'm trying to put money away as efficiently possible until then.

I already have money invested in S&S ISA but they're not going to match the return I'll get from utilising the tax and NI savings from the AVC over a 5 year period.

[milly]

Obviously its good to take advantage of the tax incentives with pensions, but I wouldn't recommend anyone under 50 going overboard with pension saving, especially if you want to retire early.
I can only see the government keep increasing the age you can access your own money.
S&S ISA's offer much more flexibility so long as you're not tempted to spend it.

I'm 60 next month and planning to retire at 65, so I'm trying to put money away as efficiently possible until then.

That's a good plan for your age, good luck.

[RobertT]

The pension vs ISA debate has been going on for years and the answer is always the same – ISA's offer more flexibility, while pensions offer more money.

In practice it's best to have both if possible to allow for all eventualities.

But anyone already at pension access age(55, rising to 57 in 2028) or expecting to be when accessing their money, will be better off financially with a pension as long as they don't pay any more than 20% on the taxable element.

AVC's obviously have the added benefit of salary sacrifice(probably only until 2029), making them more attractive than a SIPP.

[NWpostie]

The pension vs ISA debate has been going on for years and the answer is always the same – ISA's offer more flexibility, while pensions offer more money.

In practice it's best to have both if possible to allow for all eventualities.

But anyone already at pension access age(55, rising to 57 in 2028) or expecting to be when accessing their money, will be better off financially with a pension as long as they don't pay any more than 20% on the taxable element.

AVC's obviously have the added benefit of salary sacrifice(probably only until 2029), making them more attractive than a SIPP.

Is the salary sacrifice being phased out, what would replace it ?

[RobertT]

Is the salary sacrifice being phased out, what would replace it ?

It's being capped at £2,000, so any pension contributions over that amount won't benefit from that saving on NIC's.
You still get tax relief!

https://www.gov.uk/government/publicati ... april-2029

[milly]

The pension vs ISA debate has been going on for years and the answer is always the same – ISA's offer more flexibility, while pensions offer more money.

In practice it's best to have both if possible to allow for all eventualities.

But anyone already at pension access age(55, rising to 57 in 2028) or expecting to be when accessing their money, will be better off financially with a pension as long as they don't pay any more than 20% on the taxable element.

AVC's obviously have the added benefit of salary sacrifice(probably only until 2029), making them more attractive than a SIPP.

Is the salary sacrifice being phased out, what would replace it ?

It's being capped at £2k from April 2029.
We can't let the plebs have any decent perks can we?

[yellowbelly]

Obviously its good to take advantage of the tax incentives with pensions, but I wouldn't recommend anyone under 50 going overboard with pension saving, especially if you want to retire early.
I can only see the government keep increasing the age you can access your own money.
S&S ISA's offer much more flexibility so long as you're not tempted to spend it.

I'm 60 next month and planning to retire at 65, so I'm trying to put money away as efficiently possible until then.

I already have money invested in S&S ISA but they're not going to match the return I'll get from utilising the tax and NI savings from the AVC over a 5 year period.

Very similar situation to yourself. I'm maxing out what I can in the RM CDC without losing the PSE and any more I put into my own SIPP.
Get the tax relief still but obviously no NIC benefit. Cash ISA's maxed too as intend to use these as stop gap between when I finally retire and receipt of pensions/state pension, however long or short that may be. DYOR!

[heapsy]

Before the Flexiplan stopped accepting payments, I was paying £110 a week without dropping out of PSE, I believe you could go up to £125 I choose not to, now I'm currently paying £60 a week into the CDC AVC and opted into the 1% lump sum booster, it's a no brainer.

I would also take out a Stocks & Shares ISA with a ready made portfolio to opt into, research which suits you best, all profits is free of tax, plan for 5 years minimum longer is better for greater returns.

[ihatedogs]

How much can we put into the AVC before hitting the NMW limit?

Thanks.

Presuming you're on 37 hours.
£12.71 (nmw) x 37=£470.27.
Just don't go below that.