Pensions

[pavichal]

Hello

In a previous employment, I was provided with a personal pension plan into which my employer made regular Gross monthly contributions(for nearly 10 years). I left the company 3 years ago and the plan has had no further contributions made to it. I have since setup my own Limited Company as an IT Contractor(I am the Director and take a minimum salary + dividend) and I'm keen to start making contributions again.

The pensions company has indicated that I can restart Gross Employer Contributions from my Limited Company at any time.

- Are there any issues/obstacles in paying into a pension plan that was setup by my previous employer? The facility seems to be there and the pensions company seem to be happy for me to restart contributions via my Limited Company and have provided the forms to do so.

- For contributions via my Limited Company, does the plan just need to just accept Gross Employer Contributions(which mine does) or does it need to be a particular type on pension?? I’ve heard the phrases Directors Pension, Executive Pension and Personal Pension banded about. What is the difference between these and does it really matter what it is called? Does HMRC have a particular preference?

- What is the maximum monthly contribution I can make from the company and does this impact how much salary or dividends I can take in the future?

Best Regards,

Piyush

[moggy]

Best to speak with an IFA i would say, they may suggest a new pension - at which time you will be able to see if there are any penalties for moving your pot.. or they may be able to set it up to start paying into the current pension pot.

[Craig at Nixon Williams]

If the pension provider has no objection to you making further contributions then there isn't anything else to stop you from doing this. Providing the pension provider will accept gross contributions from your employer (in this case your limited company) then that will be fine - it makes no difference to HMRC what the pension is called.

You can contribute up to £50,000 to your pension this year - this will affect how much dividends you can take from the company as the profits will be reduced by whatever you contribute. If you don't intend to contribute significant amounts to the pension (less than the salary that you are taking) then it may be more tax efficient to make the contribution personally rather than through the company.

Hope this helps!
Craig