Pension Entitlement for non-worker

chrisrsmith

Hi
My partner has not worked for the past 4 years due to personal reasons and has not made any pension arrangement.

She has an NHS pension into which she stopped paying whenever she left the NHS.

From reading various threads on here it seems that a SIPP or Stakeholder pension (hope i got the terminology right/correct), is something that perhaps she should or could have.

I am slo not sure if she can retrospectively open either (or perhaps they are the same thing), for the years that she hasn't worked and can achieve some tax relief.

Any suggestions greatly appreciate.

Your_Hero

She won't need to retrospectively claim tax relief unless she has completely filled this year's allowance. Since she has not worked for the past 4 years and has not been a member of a pension scheme, she can't carry forward unused allowances.


Anyway, she is limited to £3,600 of gross pension contribution per year, i.e. she can pay in £2,880 net into a pension right now and receive basic rate tax to make it up to £3,600. Depends on how she wants to invest and the flexibility, but probably a stakeholder would be fine at this stage.

chrisrsmith

Any particular recommendation to which company to use for the Stake Holder Pension?

chrisrsmith

Your_Hero wrote: »

She won't need to retrospectively claim tax relief unless she has completely filled this year's allowance. Since she has not worked for the past 4 years and has not been a member of a pension scheme, she can't carry forward unused allowances.


Anyway, she is limited to £3,600 of gross pension contribution per year, i.e. she can pay in £2,880 net into a pension right now and receive basic rate tax to make it up to £3,600. Depends on how she wants to invest and the flexibility, but probably a stakeholder would be fine at this stage.

Sorry - can she also open one for previous years and claim the same tax relief (for those years she didn't work)?

Apologies if you already answered this - I am just useless with pensions!

atush

It was already answered and no.

To carry forward you need to have been employed.

As to what kind of pension, look at costs and investments but a PP would probably be better value than a stakeholder.

BowWow

If you are under 75, not working and have sufficient income from elsewhere it is wise to consider investing £2880 annually into a Self Invested Personal Pension with broker such as Hargreaves Lansdown. As previously mentioned in this thread Government will top up this Annual Contribution up to £3600 pa.
How you invest this within the SIPP is entirely up to you but H-L will offer a number of attractive low cost fund options including the new CF Woodford fund.
It is important to go into Drawdown before the age of 75, take the 25% lump sum, and withdraw the remainder in stages according to personal tax circumstances.
Hope this helps

System

atush wrote: »

It was already answered and no.

To carry forward you need to have been employed.
.

I think you need to have been a member of a pension scheme during the years in question, not necessarily making contributions nor employed ?

atush

To make contributions you need to be employed, as non working contribs up to 2880 dont count/

So yes, employed and a member of a scheme to carry forward.

jem16

chrisrsmith wrote: »

Sorry - can she also open one for previous years and claim the same tax relief (for those years she didn't work)?

No she can't do this as tax relief is limited to the year in which the contribution is made.

As others have said, there is the option to carry forward unused allowances from previous years but this is only in relation to those people wanting to make a higher contribution than the current £40k allowance. To get tax relief on this higher allowance you still need to be earning enough in this tax year as the tax relief cannot be carried forward. However this doesn't apply to you anyway.

xylophone

Any particular recommendation to which company to use for the Stake Holder Pension?

http://www.cavendishonline.co.uk/pensions/

You might find something here?

gadgetmind

What's her state pension looking like? There are fairly cheap ways to boost this, but you claiming certain benefits earns you years for free anyway.