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Hi all,
First time poster on this site and looking for some advise please.
About 3 years ago I got a promotion at work and it took me last the 25% increase so started paying an increased payments. Then the following year I again increased by more than 25% and am about to again increase by another 25%. I am currently paying £500 per month and it will increase to £625 per month. Whilst I may just have to accept this it does grind on me somewhat that as I earn more I pay a lot more for my daughter whilst her mum doesn’t work and her husband has just reduced his hours at his work. I feel that the current £500 I am paying each month is more than adequate for a 10 year old and would like, if possible to pay any extra (so in this case £125) into a trust in my daughters name so she at least has something when she is 21. Does anybody know if this is possible please? I guess I would have to have agreement from her mum (which is unlikely unfortunately). I just can’t speak to CMS as I lose it with them every time I speak with them as I just find they are so bias towards mums and it’s just a case of “well sorry but that’s just how it is”! Any help or advise would be much appreciated. Thanks
You can't reduce your payments to your ex below the minimum required by them.
However, I would ask how old you are? You could pay money into a pension which will reduce your liability for child maintenance, (and also your tax liability, so an added bonus) and then when you are 55 or older, you can withdraw 25% of the fund tax free and you will be taxed if you withdraw the remaining 75% - but you could treat this pension as a trust fund for your daughter.
However, if you are considering the above, you absolutely must get professional financial advice as there are other implications of taking cash out of a pension that you need proper advice on.
You can control your wages with pension contributions, work out your year ends so you are just within the 25% threshold, that means you are always a year ahead of what you are paying. Example:
Year one - P60 amount £20,000
Year 2 - If you have had a £7.5k payrise, control pension contributions so that your P60 at the end of this year will be no more than £25,000. As you will be paying on last years assesment (£20k) you will be getting the extra £5k without having that included in this assesment.
- Year 3 - You get another £7.5k pay rise, taking you to a total wages on paper now of £35k. With pension contributions, control your P60 to be within 25% of the £25k from last year (this will be about £32.5k). So this year you will be paying based on last year assesment of £25k but actually getting paid £32k.
It works well, and being a year behind, you are always getting a benefit if your wages are rising. YEs I know this will not make a difference if wages are flat, but at least this is in your control, and it has worked really well for me.
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