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Pension tax relief after change of jobs

ixtlan · 2014-10-28 10:52:22

Hi guys, I used to think that there were set percentages based on age and you could contribute to that maximum every year and get relief. However I now think that it's much more complicated than that. So... I worked 8 months last year and earned 40k. On this I was paying 15% into an optional occupational defined…

28-10-2014 10:52am

#1

ixtlan

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Posts: 1130

Hi guys,

I used to think that there were set percentages based on age and you could contribute to that maximum every year and get relief. However I now think that it's much more complicated than that.

So... I worked 8 months last year and earned 40k. On this I was paying 15% into an optional occupational defined contribution company scheme, even though my age would have allowed 25%. Then I changed jobs, and earned another 20k, but I wasn't elegible to contribute to their scheme (a PRSA) until after 6 months. Now in 2014 I am reviewing how much of a lump sum I could make to several PRSAs that I have from previous jobs.

Clearly I'm way under the 115k maximum limit. However as I read up on this a bit, I found that it seems to be the case that as I was in an occupational scheme the 10% of that income which I decided at the time not to contribute can't now be used as part of my relief (unless there was a way to get more funds into that scheme, which there isn't).

Anyone have any views? Am I mis-understanding things? It would seem unfair if an occupational pension contributor were penalised in this way, but that's my reading. That any additional pension relieved contributions can only be made from 25% of my other salary.

Ix

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