This from this month as a result of a salary increase I will have net 60 pounds a month more. Given the 10/50/50 rule does this mean in effect I could contribute about 25 pounds more into my pension per month from now on, I am only contributing minimum at the moment. Or is such an increase not allowed?
Also, aside from the above, I am only a few months into my IVA, at annual review time does my increase in salary lead to the 10/50/50 rule being applied then as well, that is, from now on my surplus income being a bit higher per month my additional 25 to 30 pounds I can always keep? Or, would they assume now I have 60 pounds more and all of that, post review time, is to become surplus on the assumption my I and E was the same as last year excluding this additional 60.
A salary increase is not dealt with under the 10/50/50 rule. The exact agreement in your arrangement will be detailed in your proposal. Generally a permanent payrise is dealt with at annual review where your payment will be increased by 50% of the net increase in income.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I have had salary rises in my first year and both PJG and Creditfix advised that I would get to keep it all until the annual review. It's almost an encouragement for you to earn more money (that's how PJG put it). Not only that, but the 10% 50/50 rule then applies to your new salary, which is of course a bonus.
In short, my increases did not result in increased payments, nor did I have to apply the 10% 50/50 rule to them. They simply pick it up at the annual review and see if your payments need to increase for the following year.
This of course is my own personal experience, so may not apply to all.
Be very careful, if you don't pay in the 50% you earn every month you could find yourself with a large amount owing at annual review time I have also read on here of people being told they owe thousands when they think they have completed their ivas due to payments not being made from salary increase, if nothing else make sure your IP makes the increase in your annual review. Personally we paid ours every month so we knew exactly what needed to be paid and what had actually been paid so no nasty surprises.
If it were me i would tuck away half to your iva (whether you pay it now or at annual review time) ... the other half will be yours and you can decide what you want to do with it - if paying into your pension is the way you go thats your decision - although personally £25 a month will not make a huge difference - you may ve better putting it into a savings account and build up a smaller reserve for emergencies
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I too had a wage rise under PJG and they told me to wait until review and do nothing, just altered the 10/50/50 threshold.
At the time I felt awkward like it was wrong. I thought they'd made a mistake.
But if you think about it the other way around it makes sense. If they tried to alter your IVA payment because you had a payrise, you'd be likely to point out that whilst you had a rise, the gas bill went up etc... So to do it properly would be a full review. These take time and effort to do, hence they leave it.
As for the 10/50/50 rule threshold it's written in the T&Cs as 10% of your "normal monthly pay" and not a set figure. Therefore, it moves with your salary month by month.
The provisions regarding taking a permanent pay rise into account should be detailed in your paperwork. Generally the rise is taken into account only at review and the increase in the meantime is yours to squirrel away for that rainy day.
Some arrangements do, however, differ and some caseworkers will also mis-interpret the agreed terms. So always make yourself fully conversant with what has been agreed in your own arrangement.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
