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Increase pension contributions?

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[Deleted User]
[Deleted User] Posts: 0 Newbie
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in Pensions, annuities & retirement planning
My husband, due to retire in 8 years, is thinking of increasing his pension contributions. With overtime he is now in the higher tax bracket and wants to increase his contributions to take him back below the higher tax band threshold. Is this a good idea? He is in a money purchase scheme.

Also although I know a bit about the difference between advantages of ISA's and pensions is there anything particular I should consider with his situation please?

I should add that I will have a State Pension but no other pension.

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  • dunstonh
    dunstonh Posts: 116,716 Forumite
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    Is this a good idea?

    Anything you can put aside for later in life is a good idea.
    Also although I know a bit about the difference between advantages of ISA's and pensions is there anything particular I should consider with his situation please?

    Consider also doing a pension for you. At the moment you are too lop sided and it will cost you in retirement.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Thank you. I am a bit concerned about my situation although ny husband said that he would sort out a joint annuity when the time comes. Any pension for me me would have to be funded by my husband. Is there any good way of doing this?
  • dunstonh
    dunstonh Posts: 116,716 Forumite
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    I am a bit concerned about my situation although ny husband said that he would sort out a joint annuity when the time comes.

    Which means the annuity rate will be lower than the a single life one. Plus, the income is still only in his name (until he dies) so you pays tax on it. Whereas you have nearly £10,000 a year you will be able to earn tax free which is not being used up.
    Any pension for me me would have to be funded by my husband. Is there any good way of doing this?

    direct debit from the joint account is the usual way.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Right. I will get him to start some sort of pension for me. I didn't know the personal allownce for a pensioner was so high.
  • dunstonh
    dunstonh Posts: 116,716 Forumite
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    onewom wrote: »
    Right. I will get him to start some sort of pension for me. I didn't know the personal allownce for a pensioner was so high.

    Yes. it makes a big difference.

    One person earning £20k creates £2000 a year tax. Two earning £10k each pay no tax. That is why retirement planning should be done as a couple.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
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    It will soon be April 5. Get it started before then
    The only thing that is constant is change.
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