[Solved] Advice please regarding pension

Hello,

I'd welcome peoples thoughts on this: I am in a similar position but have the advantage of being self employed and thus can decide on how much I want to put into my pension. Consequently are we saying that I need to put a minimum of 25% of gross income in in order for the CMS to take it into account? I am mid 40s and don't have any pension at all yet so from what I can see elsewhere online 25% would seem to be a reasonable figure to put away.

Thanks

Hello Adamski,

The 25% figure is the amount between the exiting assessed amount and the difference needed before CMS will do a reassessment before the standard annual assessment. So it is not related to pensions, only that if BennyBoy's pension contribution did reduce his total assessed earnings by 25% then they would re-assess again his calculation now, rather than waiting until his annual review.

In terms of how much into your pension, it is a grey area. CMS state that 12% of gross is seen as the appropriate amount, but this increases(unofficially) if you are older and closer to retirement and subject to when you started paying in. I think if you are only now starting with a pension you could put between 25 to 30% into your pension, subject to your circumstances. Bill posted a link earlier in this thread, which explains.

I too am Self Employed, via Limited Company. Hope it helps.

CMS work on a change in gross pay of 25% before they will look at a change of circumstances between annual reviews (actually, can anyone on here confirm that they do actually do an annual review?), so paying 25% into pension may not be enough depending on tax circumstances, but it should be in the right area. I would agree that paying that much into a pension at your age is perfectly reasonable, and in fact I'd go slightly higher than the 25% from gross just so they don't think you are doing it just to reduce your maintenance.

Yes, I get a letter on April 4 saying my review is April 28 and if I know of any changes that affect the calculation I should let them know.

Then they calculate based on what HMRC have on record for me and I don't hear from them again. That is how it is working for last two years anyway, previous to that my ex wife was making so much mischief with them, I was re-assessed 6 times in one year at one point!

hi actd,

yes CMS do an annual review. i registered with them in march, and papers say next review will be march 2020. so guessing they will just write to me and ask for income details, if they dont find anything with HMRC. better incase you dont get up over-paying. if i notice big income changes, then i would just ring them to let them know ASAP.