Hi I started paying into a pension at age 31, had my first child at 36
whats the total percentage of my gross earnings i could contribute to my employer pension scheme
cant find any guidelines anywhere...
i want to contribute 30% due to my age...
Hi there. Yeah I looked into that a while back too. I understand what you’re saying - if I jack my pension contributions way up, my income goes way down so less CM payment?…
But the CMS may decide your contributions are excessive and increase the CM payable. What’s excessive? There’s no set formula anymore so it’s down to the decision maker at CMS to determine whether or not the size of your pension contributions were specifically to avoid paying higher CM. If they decide it was then you’ll be asked to pay more CM.
The CSA used to have guidelines before it was replaced by CMS and I’m pretty sure you’d be able to argue these are reasonable.
Age Starting Pension & Reasonable Contributions:
30yrs = 12% to 18%
35yrs = 16% to 22%
40yrs = 18% to 25%
45yrs = 25% to 30%
50yrs = 30% to 45%
55yrs = 45% to 70%
So if you started at 31yrs you might struggle at 30% contribution (unless you’ve always been making 30%, in which case you could argue you haven’t increased contributions to reduce CM).
Hope that makes sense!