Starting a pension and confused?

bigadaj

ss53 wrote: »

If you husband is a higher rate tax payer and is making the pension contributions from his net pay would it not be better to have the pension in his name? This will allow him to a) gross up the pension contribution by 20% and claim an additional 25% back via self-assessment - which he could them perhaps re-cycle as additional pension contributions?. I'm no expert either but is would be worth checking this out (assuming he does not breach either annual or lifetime contribution levels)

To be honest, it would be better in pure cash terms to save through the husbands pension even at standard rate tax if it is salary sacrifice. Rather than a limited 25% contribution from the government it would translate as somewhere between 33% and 47% depending on how little or much the employer would add of the employers national insurance.

atush

It would however, be worth you having some pension in your own name as you will have a Personal allowance at retirement, the income up to this being tax free.


So saving the 2880/yr grossed up to 3600 for a decade or two into a pension will see your PA not go to waste (as your OH can't use it).

bigadaj

atush wrote: »

It would however, be worth you having some pension in your own name as you will have a Personal allowance at retirement, the income up to this being tax free.


So saving the 2880/yr grossed up to 3600 for a decade or two into a pension will see your PA not go to waste (as your OH can't use it).

Though this could be used up by the state pension. assuming current levels, and dependent on returning to work, caring etc.

atush

Well, it would be eventually possibly but then again the OP probably wont have a full state pension? So some of the PA would still be available?


But as they would not get that until age 68-69 then they have a lot of PA going begging when they could be having a PP income. I presume the husband wont be waiting to retire at 68-69?