£50 a month, is it worth it?

Ping_Man

Hi,

My wife (who will be 50 next month) doesn't have a great deal in pensions. she does not earn enough to pay tax. Would it be worth it to pay in £50 a month to one of her pensions (I was thinking of the one that had the biggest pot). I assume she will work to 65 at this satge.

Thanks for reading/replying

Lokolo

Why do you think she will only work to 65 if she doesn't have any pensions?

dunstonh

Ideally, a couple should balance their retirement planning.

e.g. you both get a £10,000 personal allowance in retirement.

If you get £20,000 pension income and your wife nil then the tax paid is £2000.
If you both earn £10,000 each then neither of you pay tax.

So, maybe, it would be worth paying a bit more into your wife's retirement planning just to make sure personal allowance is used up (if you run joint accounts then that isnt an issue but I know many people keep their finances separate).

£50 is not a lot in isolation of other information.

Also, dont assume that legacy pensions are the best option. It may be that a modern pension is better (not always but most often it is). Old pensions may be transferable and benefit from being in a modern plan (again not always but very often)

Ping_Man

Good question, I have pensions which will hopefully be OKish if nothing spectacular. Hopefully we'll both have a long and happy retirement.

Just seeing if it's worth putting in or not really :-)

saintalan

Ping_Man wrote: »

Good question, I have pensions which will hopefully be OKish if nothing spectacular. Hopefully we'll both have a long and happy retirement.

Just seeing if it's worth putting in or not really :-)

Hi & welcome to the Forum.

You didn't actually say your wife had NO pension.

Don't forget this:

What happens if you don't pay tax?
If you don't pay tax you can still pay into a personal pension scheme and benefit from basic rate tax relief (20 per cent) on the first £2,880 a year you put in. In practice this means that if you pay £2,880 the government will top up your contribution to make it £3,600. There is no tax relief for contributions above this amount.

So looks like your wife could pay in £600/year and have £750 invested for her.

Cheers

Alan

Ping_Man

Thanks for those replies :-)

Firstly, hadn't thought about the tax on income bit , so from that point of view it makes sense.

Secondly, 600 in would mean 750 invested, so in either new or legacy pension, surely a lot would go in charges?

atush

Yes, 750.

As far as charges, there will be some but there will be less in newer more modern pensions, or work pensions where they get a deal on the charges.

So check the charges and funds available. 240 a month, 2880 per year would be the best idea if you can afford it.