Should I now go for a personal pension?

geelamch

Hi all ,good evening ,quick summary of my lifestyle
Age 50
Wife 41
Me final salary scheme 2/3 of 459000
Wife doc scheme weekly contributions she, £56. Employer£ 49

2020 I will have 40 years membership ,wife will have22 years.
I pay avc of £100. Per week
Looking at going at 55
Estimated tfls 140000
Annual pension £19880
Just had a wage increase so have about £150 a week to utilise.should I open a personal pension to view a draw down in the years before my wife can access her pension or is there an alternative.

berbatov10

Is that 2/3 of £459000 or £49500?? If it is was the first thats a big pension!!

geelamch

Ok, 2/3 of 45900 plus I pay avc of £ 90 per week ( this can be taken as tfls) just wondering if I should slow down on pension and start a personal pension to enable transition from early retirement to pension time

kidmugsy

Are your pension contributions by Salary Sacrifice?

Are you planning to pay more contributions than are required to avoid higher rate tax?

If "no" and "yes", might it be better to use ISAs rather than pensions? Or even, since age 55 is only five years away, save in cash. If you opened Regular Saver accounts after 5.4.15, you'd presumably get the interest after 5/4/16. Then you'd benefit from Osborne's £1k p.a. of tax-free interest band.

On the other hand the advantage of a SIPP is that you could draw much of it down tax-efficiently and start your FS pension a bit later than 55. You're spoiled for choice.

P.S. What are your plans for the "Estimated tfls 140000"?

atush

I would pay into a personal pension and suspend your AVcs.

Because taking your pension early and reduced is more expensive and so better to use the proceeds of a personal pension so that you can leave your DB pension for longer.

kidmugsy

kidmugsy wrote: »

Then you'd benefit from Osborne's £1k p.a. of tax-free interest band.

That would be £500 p.a. if you (accidentally) are a higher rate tax payer.

geelamch

Unfortunately no salary sacrifice,
My biggest problem will be the age difference for oh to access pension benefits ( shouldn't marry younger women ).
Would a personal pension have a tax advantage over Isla's etc ,and would it be tax advantageous to put anything in wife's name.

atush

Yes, if you are not working or earning a pension is better than an isa as you get income tax free up to your allowance. So do this, instead of taking your DB pension at age 55 reduced.

And everyone gets a PA, so yes your spouse would benefit from a PP as then she could retire at 55 too. but if she wants to go before age 55, an ISa would be better.