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Pension plans

Archived UK Tier 1 (General) points system forum. This route no longer exists.

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anasjamil2
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Joined: Sat Feb 18, 2012 1:06 pm
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Pension plans

Post by anasjamil2 » Mon Sep 09, 2013 3:40 pm

Hi Experts, please can you provide some guidance on pension.

I am an Indian on Tier1 visa, will be applying for PR in 2015.

My employer has automatically enrolled me for pension. I know pension is good but I am not sure of spending my old age in UK.

May I know what happens if somebody leaves UK? does he gets contribution refunded on leaving UK? Shall I apply continue pension contribution even if I am not certain to live in UK for next 10 years?

Thanks,
Anas

kannit
Junior Member
Posts: 95
Joined: Thu Apr 14, 2011 9:27 pm

Post by kannit » Mon Sep 09, 2013 6:50 pm

Pension is personal choice however you may find online pros and cons.

However my reply is on a different aspect of pension. When you sacrifice your salary for pension your gross taxable salary is reduced by that sacrificed amount. UKBA at the time of extension or ILR will consider your gross taxable salary for awarding points.

e.g.
Salary = £ X pm
Pension Sacrifice = £ Y pm
Taxable Salary = £ (X-Y) pm

So Total Gross => £Z = £(X-Y) x 12 (i.e. for a year)

£ Z will be used for awarding earning points.

I think Car Allowance and Childcare Vouchers also pull down your taxable salary and hence gross.

Cheers!

mulderpf
Diamond Member
Posts: 1669
Joined: Sat Oct 16, 2010 7:10 am
Location: London

Post by mulderpf » Mon Sep 09, 2013 7:57 pm

Firstly, to answer your question, generally you cannot legally cash out your pension until you are 55. The point of a pension is to look after you when you retire, so regardless of where you are, the money will just sit there waiting for you until then. You would then be able to draw that from wherever you are in the world - just don't forget about it.

Secondly, I'm not sure about other companies, but my company gave me the option of using salary sacrifice to save on tax (by reducing my gross salary as kannit pointed out), so just make sure that you will either be okay with the reduced gross salary or ask your company to opt out.
Do not send me PM's with specific questions - post question in the open forum so others can also benefit from the answers.

anasjamil2
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Posts: 140
Joined: Sat Feb 18, 2012 1:06 pm
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Post by anasjamil2 » Mon Sep 09, 2013 8:15 pm

Thank you both for detailed description. I think best option for me is to opt out from pension, because presently I am not sure where I end up 10years later.

Pension will be available to me after 55 no matter where i am in the world but I am sure there will be plenty legal implications. So better save money myself. Thanks again friends.

Saga
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Posts: 235
Joined: Sun Oct 16, 2005 8:16 pm

Post by Saga » Tue Sep 10, 2013 5:10 am

^^ I reckon more than any legal complications, there will be tax both on drawing the pension amount and most probably transferring it to some other part of the world. The way UK tax its legal ordinary citizens (not Starbucks), there won't be much left after that !!

On the plus side, when you contribute a pension amount , the company contributes either the same or more. Thats puts in an extra saving. Considering UK is not the best place to save money, pension is a good option.

Just my 2 cents..

layman
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Posts: 180
Joined: Tue May 04, 2010 9:45 pm

Post by layman » Tue Sep 10, 2013 12:13 pm

kannit wrote: So Total Gross => £Z = £(X-Y) x 12 (i.e. for a year)

£ Z will be used for awarding earning points.

Cheers!
I am not sure about this. My view is that (employee)Pension contributions through salary sacrifice can be included in your gross salary. There have been cases on this forum where applicants have included the pension contributions and were awarded points. On the contrary, haven't come across a case where it has been rejected from gross salary.

For example, click here

manojk005
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Posts: 247
Joined: Thu Jul 01, 2010 10:17 am

Post by manojk005 » Wed Sep 11, 2013 6:23 pm

layman wrote:
kannit wrote: So Total Gross => £Z = £(X-Y) x 12 (i.e. for a year)

£ Z will be used for awarding earning points.

Cheers!
I am not sure about this. My view is that (employee)Pension contributions through salary sacrifice can be included in your gross salary. There have been cases on this forum where applicants have included the pension contributions and were awarded points. On the contrary, haven't come across a case where it has been rejected from gross salary.

For example, click here
Salary sacrifice for pension is considered as your salary and count towards earning point. My pension salary sacrifice was considered for awarding earning point during my initial application in 2010. If pension contribution is declared in your pay slip then you can include that in your earning. Though, you want to take a letter from employer saying that pension contribution is from you salary.

clariajoseph
Newly Registered
Posts: 2
Joined: Fri Sep 13, 2013 9:53 am

Re; Pension plan

Post by clariajoseph » Fri Sep 13, 2013 9:56 am

Hi first we should know about the full details of pension. When the government will give you pension and why the government staffs only get pension for this all information see this site will give you a solution
Pension

clariajoseph
Newly Registered
Posts: 2
Joined: Fri Sep 13, 2013 9:53 am

Re; Pension plan

Post by clariajoseph » Fri Sep 13, 2013 9:56 am

Hi first we should know about the full details of pension. When the government will give you pension and why the government staffs only get pension for this all information see this site will give you a solution
Pension

ukswus
Senior Member
Posts: 680
Joined: Fri Nov 27, 2009 4:34 pm

Post by ukswus » Fri Sep 13, 2013 11:15 am

manojk005 wrote: Salary sacrifice for pension is considered as your salary and count towards earning point. My pension salary sacrifice was considered for awarding earning point during my initial application in 2010. If pension contribution is declared in your pay slip then you can include that in your earning. Though, you want to take a letter from employer saying that pension contribution is from you salary.
Agree. My gross salary at the time of the recent extension was also NOT reduced by pension sacrifice. And why should it? That's the money I earned, which I decided to put into my pension pot.

layman
Member
Posts: 180
Joined: Tue May 04, 2010 9:45 pm

Post by layman » Wed Sep 18, 2013 2:55 pm

Did your pension sacrifice appear in your payslips? Or did you get a letter from employer about the gross salary with pension sacrifice details?

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