Advice please on paying back money towards pension

littlereddevil

Hi.I am married and have not worked for 10 years.I will be 60 end of january and have had a pension forecast of £46 per week.They say I can pay back money for 10 years (approx £3500) to get a pension of £66 a week.
My husband and I have savings which have been in my name as i don't pay tax.Interest approx. £3500 per year.
My query is if I pay back money to get more pension will I then end up having to pay tax on my interest meaning I won't be much better off.
Any advice appreciated
thanks

Pobby

I think that I would pay the 10 year contributions for the extra pension.If you kept your savings and added the £46 to the approx.£70 of interest per week this would bring you into the tax bracket.Remember that you have a tax free allowance of approx.£100 per week,you will pay tax @ 10% on the next £1,000 of income per annum.So for a small investment of £3,500 this will provide you with an extra £20 per week and your interest return on your savings will be only be reduced by a very small amount.

jamesd

You'll get back that 3500 in less than three and a half years so it seems like an excellent idea even though you'll lose a little to tax.

littlereddevil

And if I don't live that long I won't be caring about the £3500 will I ?