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  1. #1

    Increase Pension Contributions To Keep Child Benefi

    I have been trying to do my own research to find the answer to my question but the advice in various forums is quite convoluted.

    Basically our situation is we already have a child (almost 2) and our second is due in 3 weeks. I am a higher rate tax payer with a PAYE income from the NHS of 57k plus a self employment income of 6k-7k pa. I also receive interest on savings outside of ISAs of around 1k pa so 500 above the savings allowance. I already subscribe to the NHS pension scheme and contribute 12% of my salary. I have a modest S&S ISA portfolio. I salary sacrifice 1488 of my salary pa for childcare vouchers for our son.

  2. #2
    We are in receipt of child benefits for our first child and will claim them for the second in my wife's name who has now started 12 month maternity leave. She is considering not returning to work after this. Last year I paid them back during my self assessment as I was over the 50k threshold.

    My question is would I be able to contribute to a SIPP to reduce my income so I did not have to pay back the child benefit for both children?

    I understand we have a good income as a family and would politely ask for no comments regarding the morality of this, just practical advice regarding the pro's and con's of doing so. I have been sceptical regarding a SIPP in view of the potential legislative changes that could occur over the next 30 years and I prefer the flexibility and liquidity ISAs bring (I appreciate I am missing out on tax relief).

  3. #3
    Can I just check your pension conts as % of salary, is it not 12.5%?

    Can you explain whether you've deducted your pension conts and ccare vouchers already from your 57k salaried, or is that your gross salary?

  4. #4
    ps have you looked at whether tax-free childcare might be better for you than the vouchers?

    As a higher rate tax payer you are only getting relief on the first 124/month of your salary sacrifice.

  5. #5

  6. #6
    Sorry my pension contributions are 12.5% (I have recently moved up a bracket due to a pay rise). I don't know if it makes any difference but I have two NHS incomes, one as a full time clinician and one as a co-opted member of my local CCG on an advisory role.

    I have not deducted my child care vouchers or pension contributions so 57k is my gross.


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