Stop saving and increase pension??

leahcim17

Hi to all,

First post. Read a lot on this forum and there seems to be a lot of knowledgeable people so hoping you can give some advise.

To sum up I am 46 years old and currently pay into a money purchase pension scheme through my company. I pay 6%, company pay 5.5% which equates to £7k pa. Current value is £200k. I have retirement savings of around £95k in ISA's, £20k of which is with HL in a stocks & shares ISA. I add £1,500 per month into the S&S ISA (some in wife's name) and then drop in lump sums whenever I have spare cash (usually about 4k pa) into wherever I see fit at the time.

My question is particularly with the pension rules likely to change should I stop saving in the S&S ISA and put the £1,500 per month into my pension? For every £600 I add I get £1000. When I take it out I will get £850 without any growth (taking 25% tax free, balance at 20%). My pension fund could take a bit of a dive and I'd still be up!

Am I missing something or is this a no brainer in my situation?

Thanks in advance

PeacefulWaters

Makes sense to me.

What about your wife's pension arrangements?

kidmugsy

leahcim17 wrote: »

I pay 6%, company pay 5.5% which equates to £7k pa. ....should I stop saving in the S&S ISA and put the £1,500 per month into my pension? For every £600 I add I get £1000.

£7000p.a./0.115 = £60869p.a. earnings.

Subtract higher rate threshold (£42500? - anyone?)
=£18369. Multiply by 0.8 to give the net contribution = £14695
=> £1224 per month. Claim back the other 20% from HMRC.

That still leaves you space for contributing to a pension for your wife or subscribing to an ISA.

atush

If you are paying HRT it is a not brainer to contribute more.

But do look at your wife's pension arrangements as in retirement she will have a personal allowance like you do -10.5K at present- so it is good to balance.