Pension payments when working after retirement age.

[ihatedogs]

I have a colleague on collections who is still working at 70 years old. We were discussing his pension payments (. 6% standard, 1% lump sum booster & 10% to avc payments).
He's not getting salary sacrifice through his wage slip. Is there a reason for this?
Cheers.

[RobertT]

Salary sacrifice/PSE is a saving on National Insurance Contributions(NIC's).

You stop paying NIC's when you reach state pension age.

Therefore PSE won't apply in your colleagues case, because there's no savings to be made.

[ihatedogs]

Thanks Robert. Follow up question. Does he not get the income tax saving that SS brings? Cheers.

[RobertT]

PSE doesn't provide any savings on income tax, because pension payments are paid before tax is applied. It's only a saving on NIC's.

But tax relief will still apply to all pension contributions in the normal way, as long as they are no higher than earnings(max of £60k) and you're under age 75.

Tax relief and salary sacrifice are two different things!

For more info, the booklet that RM sent out before PSE was introduced is available to view here:
https://www.myroyalmail.com/sites/defau ... %20WEB.pdf

[ihatedogs]

PSE doesn't provide any savings on income tax, because pension payments are paid before tax is applied. It's only a saving on NIC's.

But tax relief will still apply to all pension contributions in the normal way, as long as they are no higher than earnings(max of £60k) and you're under age 75.

Tax relief and salary sacrifice are two different things!

For more info, the booklet that RM sent out before PSE was introduced is available to view here:
https://www.myroyalmail.com/sites/defau ... %20WEB.pdf

Much appreciated, cheers.