Moving from many work perks to zero.
Discussion
For the past 10-12 years I've been at larger companies that provide life insurance, salary sacrifice, health and group pension schemes with matched contributions.
I am starting with a commercially young- aka startup- shortly and they (quite rightly) are just providing me with an agreed, set wage. I combined several pension pots (all small sadly) into one when I joined SJP last year and so I wonder how best to somehow contribute in the most tax efficient way. I am not great at knowing my way around the ins and outs of it all but what are my options IRT pension or similar? Would it be best to pay funds in SJP? Can I claim tax back in my self assessment if it is pension stuff?
Any advice on this great received, thank you. Also health and insurance high up my list too.
I am starting with a commercially young- aka startup- shortly and they (quite rightly) are just providing me with an agreed, set wage. I combined several pension pots (all small sadly) into one when I joined SJP last year and so I wonder how best to somehow contribute in the most tax efficient way. I am not great at knowing my way around the ins and outs of it all but what are my options IRT pension or similar? Would it be best to pay funds in SJP? Can I claim tax back in my self assessment if it is pension stuff?
Any advice on this great received, thank you. Also health and insurance high up my list too.
Efficiency comes from the employer - leaving aside their legal obligation to offer a workplace pension, if they offer salary sacrifice, they look to make employers NI savings as well, so pester them to get on it.
Health insurance etc, you've got to make a decision based on the value you perceive, but again, the cost to you versus the employer for DISB sums is frankly irritating.
P.S. I know you're going to stick with SJP, but worth looking in an idle moment at how much that's costing you every day your money wallows there.
Health insurance etc, you've got to make a decision based on the value you perceive, but again, the cost to you versus the employer for DISB sums is frankly irritating.
P.S. I know you're going to stick with SJP, but worth looking in an idle moment at how much that's costing you every day your money wallows there.
TopTrump said:
Ok, well aside from that what would you recommend as I'm sticking with them for now.
You know you can do a lot better than SJP. Just open up a SIPP with another provider & don't waste any more on SJP.Salsac is the most efficient way to invest in a pension so try & get that agreed. As for health & life insurance it's expensive so hopefully you took account of the costs when you salary was agreed. For a job with zero benefits the salary needs to be high to compensate.
As above, open a SIPP with one of the investment platforms - Interactive Investor, Hargreaves Lansdown or AJ Bell will probably be your best bet. It's really hard to compare fees but they're all in the same ballpark. All have great apps and information to help steer you. Painless to set up.
Comments re SJP regarding fees are noteworthy. They have (quite rightly) come in for a lot of stick about fees and also for the performance of their funds (see Spot The Dog). They are reducing fees but they will still be very expensive v's other financial advisers. Ultimately it you would probably be better off seeking out an Independent Financial Adviser (SJP are not independent). Some on will here have a dim view of IFAs but they will really add value in investment selection and tax wrappers etc (I am not an IFA). Good luck
Comments re SJP regarding fees are noteworthy. They have (quite rightly) come in for a lot of stick about fees and also for the performance of their funds (see Spot The Dog). They are reducing fees but they will still be very expensive v's other financial advisers. Ultimately it you would probably be better off seeking out an Independent Financial Adviser (SJP are not independent). Some on will here have a dim view of IFAs but they will really add value in investment selection and tax wrappers etc (I am not an IFA). Good luck
Gixer968CS said:
As above, open a SIPP with one of the investment platforms - Interactive Investor, Hargreaves Lansdown or AJ Bell will probably be your best bet. It's really hard to compare fees but they're all in the same ballpark. All have great apps and information to help steer you. Painless to set up.
Comments re SJP regarding fees are noteworthy. They have (quite rightly) come in for a lot of stick about fees and also for the performance of their funds (see Spot The Dog). They are reducing fees but they will still be very expensive v's other financial advisers. Ultimately it you would probably be better off seeking out an Independent Financial Adviser (SJP are not independent). Some on will here have a dim view of IFAs but they will really add value in investment selection and tax wrappers etc (I am not an IFA). Good luck
I get the feeling from his previous comments that OP will be of the "I don't give a fComments re SJP regarding fees are noteworthy. They have (quite rightly) come in for a lot of stick about fees and also for the performance of their funds (see Spot The Dog). They are reducing fees but they will still be very expensive v's other financial advisers. Ultimately it you would probably be better off seeking out an Independent Financial Adviser (SJP are not independent). Some on will here have a dim view of IFAs but they will really add value in investment selection and tax wrappers etc (I am not an IFA). Good luck
k" opinion --because taking an interest requires a bit of effort -- right up until he realises how much of his money SJP are taking for themselves.Horse/water/grumble/grumble/grumble
I'll ignore the SJP bit as I'm not sure that's significant - it's just a platform choice for the pension funds.
I've done similar job moves - i.e. moving from large firms with all the benefits under the sun to smaller ones where basically it's salary and not a lot else.
In my case, I did start a life insurance policy. Having done this, I learnt a lot including the fact that it might make sense for lots of people who might otherwise assume that Death In Service cover is enough - It's generally not. This is pretty cheap and a good guarantee for the family should the worst happen to me. I've continued this since.
Pension wise, a couple of things to note - some companies that offer the minimum government mandated pension only actually offer the minimum - i.e. the 8% contribution that is often quoted on a job spec only applies to earnings between the £6,240 and £50,270 a year before tax numbers. This detail has definitely caught a few people out in the past.
https://www.gov.uk/workplace-pensions/what-you-you... - This is probably different to the larger firm that will often pay the percentage on the entire salary.
I monitor my pensions fairly regularly, and I dropped lump sums in every year to make a contribution as I wanted when my employer wasn't great - Arguably, setting a monthly contribution would be a better 'set and forget' approach. Looking back now, I wish I'd put even more in
In either case, you will need to do a tax return to claim the higher rate tax relief back - I have continued to overpay into my pension and claim the tax back after moving back to a large company with better benefits. I almost see this as a method of 'saving' through the year with the added benefit that the savings bonus that you get back after completing the tax return is paid to you by the Gov.
I've done similar job moves - i.e. moving from large firms with all the benefits under the sun to smaller ones where basically it's salary and not a lot else.
In my case, I did start a life insurance policy. Having done this, I learnt a lot including the fact that it might make sense for lots of people who might otherwise assume that Death In Service cover is enough - It's generally not. This is pretty cheap and a good guarantee for the family should the worst happen to me. I've continued this since.
Pension wise, a couple of things to note - some companies that offer the minimum government mandated pension only actually offer the minimum - i.e. the 8% contribution that is often quoted on a job spec only applies to earnings between the £6,240 and £50,270 a year before tax numbers. This detail has definitely caught a few people out in the past.
https://www.gov.uk/workplace-pensions/what-you-you... - This is probably different to the larger firm that will often pay the percentage on the entire salary.
I monitor my pensions fairly regularly, and I dropped lump sums in every year to make a contribution as I wanted when my employer wasn't great - Arguably, setting a monthly contribution would be a better 'set and forget' approach. Looking back now, I wish I'd put even more in
In either case, you will need to do a tax return to claim the higher rate tax relief back - I have continued to overpay into my pension and claim the tax back after moving back to a large company with better benefits. I almost see this as a method of 'saving' through the year with the added benefit that the savings bonus that you get back after completing the tax return is paid to you by the Gov.
TopTrump said:
Ok, well aside from that what would you recommend as I'm sticking with them for now.
I don't know how far you are into your career or how much you have with SJP but there are multiple reports online of fees exceeding growth, whereby next time you get a valuation, it's lower than you started with. If you're fine with that outcome then by all means stick with them.fat80b said:
I'll ignore the SJP bit as I'm not sure that's significant - it's just a platform choice for the pension funds.
I've done similar job moves - i.e. moving from large firms with all the benefits under the sun to smaller ones where basically it's salary and not a lot else.
In my case, I did start a life insurance policy. Having done this, I learnt a lot including the fact that it might make sense for lots of people who might otherwise assume that Death In Service cover is enough - It's generally not. This is pretty cheap and a good guarantee for the family should the worst happen to me. I've continued this since.
Pension wise, a couple of things to note - some companies that offer the minimum government mandated pension only actually offer the minimum - i.e. the 8% contribution that is often quoted on a job spec only applies to earnings between the £6,240 and £50,270 a year before tax numbers. This detail has definitely caught a few people out in the past.
https://www.gov.uk/workplace-pensions/what-you-you... - This is probably different to the larger firm that will often pay the percentage on the entire salary.
I monitor my pensions fairly regularly, and I dropped lump sums in every year to make a contribution as I wanted when my employer wasn't great - Arguably, setting a monthly contribution would be a better 'set and forget' approach. Looking back now, I wish I'd put even more in
In either case, you will need to do a tax return to claim the higher rate tax relief back - I have continued to overpay into my pension and claim the tax back after moving back to a large company with better benefits. I almost see this as a method of 'saving' through the year with the added benefit that the savings bonus that you get back after completing the tax return is paid to you by the Gov.
This is great advice, thanks.I've done similar job moves - i.e. moving from large firms with all the benefits under the sun to smaller ones where basically it's salary and not a lot else.
In my case, I did start a life insurance policy. Having done this, I learnt a lot including the fact that it might make sense for lots of people who might otherwise assume that Death In Service cover is enough - It's generally not. This is pretty cheap and a good guarantee for the family should the worst happen to me. I've continued this since.
Pension wise, a couple of things to note - some companies that offer the minimum government mandated pension only actually offer the minimum - i.e. the 8% contribution that is often quoted on a job spec only applies to earnings between the £6,240 and £50,270 a year before tax numbers. This detail has definitely caught a few people out in the past.
https://www.gov.uk/workplace-pensions/what-you-you... - This is probably different to the larger firm that will often pay the percentage on the entire salary.
I monitor my pensions fairly regularly, and I dropped lump sums in every year to make a contribution as I wanted when my employer wasn't great - Arguably, setting a monthly contribution would be a better 'set and forget' approach. Looking back now, I wish I'd put even more in
In either case, you will need to do a tax return to claim the higher rate tax relief back - I have continued to overpay into my pension and claim the tax back after moving back to a large company with better benefits. I almost see this as a method of 'saving' through the year with the added benefit that the savings bonus that you get back after completing the tax return is paid to you by the Gov.
Question: If I pay theoretically 2k per year into a SIPP- in my tax return can I claim the tax back. The bit that is confusing me is that any investment I make is from my taxed PAYE income. As mentioned, go easy on my this is not my forte.
TopTrump said:
I am feeling the love for SJP 
I almost didn't want to stipulate that as I didn't want advice around that on this thread, I feared his would happen. You are right and I will look at this but have a lot else going on right now too.
Well, getting out of SJP is a good way of boosting your returns on your pension investments. I almost didn't want to stipulate that as I didn't want advice around that on this thread, I feared his would happen. You are right and I will look at this but have a lot else going on right now too.SJP aside if you cannot get your employer to agree to salsac your pension contributions then whether you need to get involved with SA returns depends on your tax rate. If you are a 25% rate payer then the pension provider will add the tax credit to your pension a few months after you make a payment. If you are a 40% rate payer then you will need to reclaim the extra tax credit via SA. If you earn a lot (up around £200k) then you may get hit by taper relief but then it get complicated.
https://www.hl.co.uk/pensions/contributions
As far as life insurance is concerned then what you need depends on you personal circumstances. Simple Life insurance (you die, they pay) is cheap but the payout it isn't going to support a family for 20 years. Statistically you are much more likley to be seriously ill or injured than actually die so you might want to look at Critical Illness insurance but it's expensive for decent cover.
TopTrump said:
Question: If I pay theoretically 2k per year into a SIPP- in my tax return can I claim the tax back. The bit that is confusing me is that any investment I make is from my taxed PAYE income. As mentioned, go easy on my this is not my forte.
Yes, up to a total of £60K of pension contribs for 2023-24. For 2024+ there won't be a limit, unless the next government decides to impose one.If you put 1k into your pension, it will result in £1200 actually landing in the fund as the pension provider will recover the basic rate of tax on the way in.
If you are a higher rate tax payer then you claim the rest of the tax back on your tax return.
I.e. you can claim another 200 or 250 back as a refund (depending on your tax band) meaning that the £1200 in your pension only actually cost you £750
https://www.gov.uk/tax-on-your-private-pension/pen...
If you are a higher rate tax payer then you claim the rest of the tax back on your tax return.
I.e. you can claim another 200 or 250 back as a refund (depending on your tax band) meaning that the £1200 in your pension only actually cost you £750
https://www.gov.uk/tax-on-your-private-pension/pen...
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Just to add that I’m not making any recommendations as regards to any commercial links within the article.
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