Pay late into 2023 pension (in 2024) or increase AVC

[presidenttttt]

Is there any difference between a retrospective pension payment and bumping AVCs for a few months? It should amount to the same thing - if done right- is there a way to do it wrong?

In other words, given choice of bumping up AVCs for a few months to drastically reduce take home pay (and run down some cash reserves), or putting cash into pension as an additional 2023 contributions- is there considerations here I need to be aware of?

One specific I am thinking about might be USC - could I end up double paying or something similar and shafting myself with a mistake most people wouldn't even be aware they are making?

Also the limit is 20% of your gross pay (in your 30s), and this is regardless of what employer pays in, ie 20% of your own contributions

 

[Corola]

It's better to make a retrospective payment because it leaves you with more options.

You can only make a payment for 2023 until 31/10/2024. After that date you lose the opportunity to use that year's allowance. If instead you bump your AVCs for a few months you'll be taking them from 2024's allowance, so you will have less flexibility next year.

 

[Persius]

As mentioned in another thread, if you changed jobs in 2023 then it would affect the max contribution limit that you get tax relief on. And if you changed jobs in 2024, then you can't make any contribution for 2023 any more (as I understand it).

 

[moore82]

I'm in a similar situation and posted about this yesterday, but it seems that my post has since been deleted. @presidenttttt did you end up going with a retrospective AVC in the end?