Originally Posted by
meleagertoo
You're doing something seriously wrong if your pension only benefits £10K when you put £10K into it. You should be claiming tax relief so with employer's NI contribution refund added your £10K becomes more like £15K.
No-one should be missing the opportunity to get the government to add up to 50% to their savings!
Backwards reasoning (but the correct conclusion)!
If you put £10k into your pension, don't give the government credit for gifting you money - they don't - it was your money, - it's just that you don't have to pay tax on it. In practice, if you pay into a SIPP from cash you've earned (ie already paid tax on), it's gets a basic rate tax refund top up within a couple of weeks, and then you'll get the higher rate refund (on the tax you've already paid) by doing an end of year tax return. Plus of course, the employer will contribute to a company pension - but all the same, there's no government contribution - all you're getting is a waiver from tax. The company can credit you with the saved employer NI, but usually they pocket that amount. How long the government give full tax relief on pension contributions remains open to speculation.