Question
My daughter opened a private pension with Aegon 4 years ago when a student. She pays £2880 per annum with the Government paying £720. She has now joined the Teacher`s Pension scheme in England - has a full time permanent teaching job.
My question :
Can she continue contributing to the Aegon pension and still receive the £720 from the Govt as well as be a member of the Teachers scheme?.Answer
Yes, she can. She's allowed to contribute into a personal pension (such as the Aegon pension she has) as well as an occupational pension and enjoy contribution tax relief on both.
The only proviso is that tax relief will only be given on contributions (including those made by an employer) up to her earnings or £50,000 a year, whichever is lower.
As an alternative to paying more money into the Aegon pension she could consider buying extra teacher's pension instead as this avoids investment risk (which effectively falls on taxpayers who ultimately pay for the scheme), but then there's no guarantee teacher's pension benefits/rules won't change in future or that she'll send up better off versus the Aegon pension.
My daughter opened a private pension with Aegon 4 years ago when a student. She pays £2880 per annum with the Government paying £720. She has now joined the Teacher`s Pension scheme in England - has a full time permanent teaching job.
My question :
Can she continue contributing to the Aegon pension and still receive the £720 from the Govt as well as be a member of the Teachers scheme?.Answer
Yes, she can. She's allowed to contribute into a personal pension (such as the Aegon pension she has) as well as an occupational pension and enjoy contribution tax relief on both.
The only proviso is that tax relief will only be given on contributions (including those made by an employer) up to her earnings or £50,000 a year, whichever is lower.
As an alternative to paying more money into the Aegon pension she could consider buying extra teacher's pension instead as this avoids investment risk (which effectively falls on taxpayers who ultimately pay for the scheme), but then there's no guarantee teacher's pension benefits/rules won't change in future or that she'll send up better off versus the Aegon pension.
Read this Q and A at http://www.candidmoney.com/questions/question630.aspx
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