Wife's Stakeholder Pension

Winner01

Hi,

My wife gave up work nearly 3 years ago, in order to bring up our children.

We decided to continue paying into her Stakeholder pension and I now pay the contributions.

I've just started wondering if we should have notified anyone of the change or if there is anything to consider tax wise?

Any comments would be appreciated.

Kind Regards
Winner01

shaunrc

Hi Winner

There are two main things to consider.

1. As she now has no earnings she cannot pay in more than £3600 in gross terms per year and claim tax relief on it.

2. If you are a higher rate taxpayer you cannot claim it on contributions for her. However even if you are it may make sense to make some payments to use up her personal allowance in retirement (on which no tax is paid). This of course requires some guessing of limits etc. if the 2 of you are a long way from retiring... It also requires a little bit of thought about both of you likely financial situations in retirement.

jh2009

I dont think theres anything to worry about, if contributions are no more than £2,880 per year. (tax relief increases this to £3600 per year).

This assumes she has no income.

Winner01

Hi Shaun,

Many Thanks for your response.

I am a tad short of the high rate tax band and we do pay in less than the £3600 limit.

I therefore assume I should not do anything at the moment?

Regards
Steve