Rmdcp avc pse

anini · Post by **anini** » 05 Dec 2017, 20:25

Hi everybody, I am currently topping up my pension with AVCs. I couldn't work out the limit to maximize benefiting from PSE.
My question is- When I go over the PSE limit on a certain week, tax is paid on gross earnings and pensions and AVCs are deducted after tax then shouldn't the government top up the pension with tax relief? That doesn't seem to be the case when I look at the contributions made. All replies welcome.

Post by **RobertT** » 06 Dec 2017, 04:27

The amount you pay into your pension is shown in gross terms on your pay slip, and that applies to both the standard contribution and any AVC’s.

So in simple terms, if you’re paying £10 per week in pension payments, your income tax will be reduced by £2 for tax relief and your NIC's by £1.20 for PSE, giving you a net contribution of £6.80. The government are paying the other £3.20.

If you go over the PSE limit, you won’t get that £1.20 and you’ll be paying more NIC’s.

maisymoo04 · Post by **maisymoo04** » 06 Dec 2017, 14:21

Decky Boy · Post by **Decky Boy** » 06 Dec 2017, 15:11

Paying AVCs into the Pension is a no-brainer (especially with PSE). As the above post indicates if you invest £6.80 another £3.20 goes into your chosen fund Free of Charge to you

AVCs are "the Dog's Bollocks"

I only wish I started paying in years before I actually did

anini · Post by **anini** » 07 Dec 2017, 20:07

Thanks.