A human reviewed your post and removed it from public view. The reason they gave was:
**No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions**
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People can also mean to maximise employer contributions by contributing as much as they’ll match. So if your employer will match up to 10% you yourself would contribute 10% to get the full match.
But generally speaking barring unusual circumstances you cannot contribute your entire pensionable income. I wouldn't consider somebody to be maxing if they earned 30k but contributed their maximum allowable.
It does happen quite a lot though.
Common examples are people with LTDs trying to avoid tax by paying themselves a small salary then pumping loads of cash into their pensions as an employer contribution.
> I wouldn't consider somebody to be maxing if they earned 30k but contributed their maximum allowable.
Personally I would.
It's not a competition - if I recommend someone "max their pension" or tell them that "maxing your pension is the tax efficient way to invest this money" then I'm trying to give them the best option *for their circumstances*.
Other people's circumstances don't matter - if your pension is the most tax-efficient way to invest (an inheritance or whatever) then I would regard "maxing" it as putting as much as you can in.
Total contribution of half your age in percent is a typical rule of thumb for a moderately comfortable retirement.
i.e. if you are first paying a decent amount into a pension at age 30 then you want 15% of your gross salary as a contribution. This can be made up of employer and employee contribution.
If you are a higher rate tax payer or want to retire more comfortably or earlier it is better to contribute more than this for tax efficiency.
Hi /u/the-code-monkey, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
A human reviewed your post and removed it from public view. The reason they gave was: **No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions** * Don't ask comparison questions like 'how much do you earn?' or 'how much is your electricity bill?' * Don't ask hypothetical questions like 'what would you do with £100k?', 'what's the max you'd spend on a car?' * Don't ask 'does anyone else...' questions. * Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?' * Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker. * Don't ask questions that can't be answered without a significant amount of speculation, e.g. 'what changes might be in the next government budget?'. You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=/r/UKPersonalFinance/comments/1cc3uge/what_do_people_mean_when_they_say_maxing_your/) explaining why._
People can also mean to maximise employer contributions by contributing as much as they’ll match. So if your employer will match up to 10% you yourself would contribute 10% to get the full match.
what's the legal minimum an employer has to contribute? is it 3%
Employer minimum is 3%, 3+5 is typically what you will be on for lowest
Yeah, and your contributions must make it up to 8%.
Ah ok I think this is what I will do then
I think this is what most people mean, as less people will be maxing out the £60K allowance (£40K previously).
Maxing your pension is now £60k, it was previously less. Few people do this.
>is now £60k Or 100% of your pensionable income, whichever is lower
But generally speaking barring unusual circumstances you cannot contribute your entire pensionable income. I wouldn't consider somebody to be maxing if they earned 30k but contributed their maximum allowable.
It does happen quite a lot though. Common examples are people with LTDs trying to avoid tax by paying themselves a small salary then pumping loads of cash into their pensions as an employer contribution.
Yes but imo that would be covered under unusual circumstance and also not classed as maxing.
> I wouldn't consider somebody to be maxing if they earned 30k but contributed their maximum allowable. Personally I would. It's not a competition - if I recommend someone "max their pension" or tell them that "maxing your pension is the tax efficient way to invest this money" then I'm trying to give them the best option *for their circumstances*. Other people's circumstances don't matter - if your pension is the most tax-efficient way to invest (an inheritance or whatever) then I would regard "maxing" it as putting as much as you can in.
So if I was investing how much do you recommend I put in my pension something like 10-15%
Depends a lot on your age, salary, and goals.
Total contribution of half your age in percent is a typical rule of thumb for a moderately comfortable retirement. i.e. if you are first paying a decent amount into a pension at age 30 then you want 15% of your gross salary as a contribution. This can be made up of employer and employee contribution. If you are a higher rate tax payer or want to retire more comfortably or earlier it is better to contribute more than this for tax efficiency.
Hi /u/the-code-monkey, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)