Invest future surplus income into a money purchase
Contributions of surplus income into a money purchase can be scheduled on the Pensions > Money Purchase screen.
Enter the gross annual contribution in the Annual Contribution £ field.
Contributions can be entered either as a total annual amount or as a percentage of salary. For example, an entry of 8% would mean that the client plans to contribute eight per cent of his future salary to this pension.
Note: This annual contribution amount should always be a gross figure, which the software will net down annually by 20% when applying tax relief. Contributions will also provide income relief where appropriate as the software calculates annual taxes.
The default contribution period for future pension contributions is that they will be made from the Start of the plan until Retirement. Check the Timings of the contributions are correct in the Timings screen.
Note that pension contributions are limited to either salary or the current £40,000 annual maximum, whichever is the lower of the two figures. Regular earnings define one’s pensionable salary. Bonuses and dividends are not pensionable income. Without supporting earnings – which are entered on the Employment screen – pension contributions are limited to £3,600 per annum.
Check the charts for these future contributions.
To view these contributions, click Let's See.
Click the icon indicated below to bring up the Detailed View.
Select the Pensions the tab and see Contributions. Click on the Pension’s name for more information.
Planned contributions will be shown in the Contributions Scheduled column, which will show both the amount of the planned contribution and the amount of the actual deposit. The software will take the contribution amount, which is assumed to be a gross contribution, and will net it down by 20% to account for tax relief.
The portion of the contribution provided through tax relief will be shown under Contributions Unscheduled. Unscheduled contributions shows contributions that are not taken from the contributors income, which may also include employer contributions.