saving/pension planning

donsaini

just a quick question.

i'm higher rate tax payer. salary £52k. in nhs pension scheme

wife lower rate tax. salary£12k. has few years of private pension.

also between us have about £30k isa.

both 31yrs

as a rule of thumb is it better for me to save towards pension for both of us as 40% tax relief, her to save now as no extra tax to pay.

many thanks
:beer:

dunstonh

It depends. You obviously get 40% relief on your contributions compared with her 22%. However, in retirement you are going to be a basic rate taxpayer. She may be a non tax payer.

Your pension scheme has good spouse benefits in the event of your death. It would be virtually impossible for any personal pension arrangement to match those benefits so buying of added years would be a good way to go. In addition to the higher rate tax relief.

Ideally you should have some pension provision for your wife to at least use up her personal allowance so her tax free income isnt wasted. Then in your case, use you occupational scheme. Anyone else reading this post shouldnt apply this situation to themselves as it changes depending on the pension arrangements in place.

I should also point out that this is not advice. Its something to investigate based on what you have said. There is insufficient information available here to give advice. Things like early retirement potential, for example, could change the answer.