New Pension for wife

FatDickie

I need some advice please.

Her indoors has just turned 40, works part time and earns circa £6k per annum

She doesn't have a current pension.

She did contract out of serps for a number of years, but then contracted back in about 5 years ago.

Therefore she has a Prudential plan sitting there with a value of just £2k, into which no payments have been made for the past few years.

We are now in a financial position to invest say £100 per month into a pension plan for her.

Where is the best place to go?

Are we best off going somewhere like cavendish online?

Is it best to get a stakeholder or personal plan?

Who with.... Scottish Widows?

Should we also transfer the prudential plan into this?


Reason for my apparent ignorance, is that I have always had a company pension scheme, with Post Office (first 10 years of working life) and Scottish Widows (past 15 years) so haven't needed to look into this before.




Cue Bendix slagging off my ignorance on pension matters

McKneff

Just an idea and i fully expect to get shot down here but hey ho. I am aslo ignorant.

My own thoughts are to put the £100 into an isa for the next 25 years ending up with a pot of 25 x £1,200 which she will have total access to. Rather than a pension of a pittance which is what a late pension will give. I'm sure that someone will come along with the figures.
I have been paying into my company pension now for over 20 years -me 4% and the company 6%, know what i will get in October when i am 60 - £40 a week. I dont expect i shall get the full value of what i have paid in as my family are not long livers. Its all a gamble. But like i say, i am quite happy to be corrected.

jem16

FatDickie wrote: »

Where is the best place to go?

Are we best off going somewhere like cavendish online?

Do you know enough to make your own investment choices of funds to go inside the pension?

Is it best to get a stakeholder or personal plan?

Who with.... Scottish Widows?

Should we also transfer the prudential plan into this?

Sounds like you need advice - perhaps best to see an IFA.

jem16

McKneff wrote: »

My own thoughts are to put the £100 into an isa for the next 25 years ending up with a pot of 25 x £1,200 which she will have total access to. Rather than a pension of a pittance which is what a late pension will give. I'm sure that someone will come along with the figures.

The plan should be to maximise pension income to use up the £10k personal allowance. The OP's wife will not have used up all of this allowance so a pension should be looked at first as it will gain on tax relief on the way in.

After the £10k allowance is used up S&S ISAs are usually the way to go when there is no company contribution.

margaretclare

McKneff wrote: »

Just an idea and i fully expect to get shot down here but hey ho. I am aslo ignorant.

My own thoughts are to put the £100 into an isa for the next 25 years ending up with a pot of 25 x £1,200 which she will have total access to. Rather than a pension of a pittance which is what a late pension will give. I'm sure that someone will come along with the figures.
I have been paying into my company pension now for over 20 years -me 4% and the company 6%, know what i will get in October when i am 60 - £40 a week. I dont expect i shall get the full value of what i have paid in as my family are not long livers. Its all a gamble. But like i say, i am quite happy to be corrected.

With any form of a pension - you say £100 a month - she will also have the benefit of the taxman's contribution. For example, if she paid in £80 the taxman will make that up to £100, the total to be invested. She has another 20+ years to go before she needs to think about drawing a pension, and in that time she can build up a worthwhile pot which has those years in which to grow. Putting money into a cash ISA is hardly worth it any more for the low interest rates. The only advantage that I can see of a cash ISA is that you don't pay tax on the interest, but then the interest rates are piddling now compared to what they were just a year or so ago. DH and I have transferred our cash ISAs into stocks-and-shares ISAs for that reason - at least they're growing now.

You can start a pension at any age. The stakeholder pension idea was IMHO one of GB's better brainwaves. You can pay into it from unearned income i.e. benefits, other pensions, and you can pay into one even after you reach retirement age. I did that, then transferred it into a SIPP.

Like you, my family has not been long-lived, but then, we have far better living conditions now. I have already outlived my mother, grandmother and a long line of female ancestors. If we manage to avoid being killed in wars and avoid diseases of lifestyle - like smoking - we may live a lot longer than we expected to. People are now commonly living to 100!

bendix

FatDickie wrote: »

Cue Bendix slagging off my ignorance on pension matters

On the contrary. Your question shows two things: one, that you are responsibly curious about the situation and, two, that you have obviously done some basic thought and understand the basics of what you're doing.

Can't fault that.

hudsonmat

Sorry to hijack the thread but does the £10K personal allowance incclude any state pension received? Isn't the full state pension about this amount on it's own?

jem16

hudsonmat wrote: »

Sorry to hijack the thread but does the £10K personal allowance incclude any state pension received?

Yes it does.

Isn't the full state pension about this amount on it's own?

Basic pension entitlement is £4953. Depending on your entitlement to SERPS/S2P you could get around £9k.

EdInvestor

jem16 wrote: »

Basic pension entitlement is £4953. Depending on your entitlement to SERPS/S2P you could get around £9k.

Some people (not many) get as much as 12k.Over 10k isn't uncommon in the south where salaries are somewhat higher.

margaretclare

Well, DH gets £9810.84 SRP + SERPS. His annuity from an earlier career is £308.16, total £12,897.00.

I get mine separately.