Some really basic Pension questions

RedXIV

Hey guys,

I think seeing my payslip today reminded me that I should probably investigate more about my pension.

I've been very sporadic about paying in to pensions as I've changed jobs a fair bit and most of my jobs didn't really support dedicated pension schemes etc, but the latest job I've taken, I've decided to jump straight in.

According to my welcome pack, if I contribute 5% of my income, my employer will contribute 7%. That's the max the employer will pay. I was looking at Aviva's mind the gap site and noticed that as you tweak various settings, it's forcing my employer pension to drop. I.e. if I up my personal contributions to 10% it knocks my employer contribution to 5%.

So first question, Does the 15% limit for under 30s include employer contribution as suggested by the site?

I think the site is using whatever I contribute now to estimate what I will have when I retire. I'd like to find a calculator that will allow me to change the contributions for different stages in my life.
Is there a calculator that allows me see either the calculations or one that allows you to add caveats such as "when I hit 30, up contribution to 20%"

Also, when i'm calculating its saying what my "target income" is. is this income liable for income tax? Or are pensions exempt? or in a different tax bracket?

Thanks for the help with this guys! I really appreciate it!

chrysagon

ITS A MINEFIELD, and as friends of mine discoverd, they lost or are losing on theirs, so do yer homework first

RedXIV

chrysagon wrote: »

ITS A MINEFIELD, and as friends of mine discoverd, they lost or are losing on theirs, so do yer homework first

........see now I'm really worried!!!

NewCorkLad

So first question, Does the 15% limit for under 30s include employer contribution as suggested by the site?

Yes


Is there a calculator that allows me see either the calculations or one that allows you to add caveats such as "when I hit 30, up contribution to 20%"

Dont think so.

Also, when i'm calculating its saying what my "target income" is. is this income liable for income tax? Or are pensions exempt? or in a different tax bracket?

No your target income on retirement in these calculators is usually 66% of your current income. Your pension income after taking your tax free lump sum will be liable for income tax but that depends on your income at the time.

The J Stands for Jay

Is it a PRSA or a company pension scheme?

RedXIV

McGaggs wrote: »

Is it a PRSA or a company pension scheme?

Its a company scheme as far as I know.

Still trying to get more details on it from work here but I'm pretty sure on that point

chrysagon

what way does tax relief work?

NewCorkLad

chrysagon wrote: »

what way does tax relief work?

You dont pay income tax on your contributions and your pension grows tax free.

chrysagon

so if yer paying 30 euro a wk, it comes srtraight out and yer taxed on the rest?

NewCorkLad

chrysagon wrote: »

so if yer paying 30 euro a wk, it comes srtraight out and yer taxed on the rest?

Effectively.

ANXIOUS

ER contributions are not taken into account. When you are calculating the age related percentage you can contribute.

The J Stands for Jay

RedXIV wrote: »

Its a company scheme as far as I know.

Still trying to get more details on it from work here but I'm pretty sure on that point

In that case, any contribution your employer make does not count towards your limit.

Oral Surgeon

NewCorkLad wrote: »

You dont pay income tax on your contributions and your pension grows tax free.

Nope!!

tomfoolery60

NewCorkLad wrote: »

So first question, Does the 15% limit for under 30s include employer contribution as suggested by the site?

Previous poster not quite correct. If it's an occupational scheme of only your contributions count towards 15% - if it's a PRSA then both your contributions count. There was an anomaly that still hasn't been changed in legislation - google it (promises made but AFAIK nothing done about it). To be sure, ask the scheme providers

Henry Ford III

Agreed. Revenue maximum funding rates are pretty decent. A wealthy employer can pay in a hefty proportion of salary on behalf of it's employee/director.