Contribute more to company pension or SIPP for my wife?

jem16

arbster wrote: »

We're pretty sure it is in her name. We've actually never got round to opting out of receiving CB, so I end up with an underpayment on my self-assessment. Does that mean she will continue to receive NI credits if I remain opted in?

Yes but only up till youngest child is age 12.

xylophone

My wife is 45 but has no pension provision over and above the state pension, having not worked for the past 16 years

Your wife had no occupational pension provision before she ceased working outside the home?

Re HRP/tax credits see

https://www.gov.uk/home-responsibilities-protection-hrp/overview

atush

arbster wrote: »

We're pretty sure it is in her name. We've actually never got round to opting out of receiving CB, so I end up with an underpayment on my self-assessment. Does that mean she will continue to receive NI credits if I remain opted in?


Will do.


No, S&S ISA allowances are not fully used but will seek to address that before the end of this tax year. Unwrapped cash is either joint (Santander 123) or in my name because she doesn't have the appetite to juggle lots of bank accounts. I'm working on it, though.

It is stupid to pay 40% tax on your savings. Put it in her name and still you can do the juggling?

atush

jem16 wrote: »

Yes but only up till youngest child is age 12.

Plus having had it in her name, she will continue to receive credits if you opt out for income reasons.
And could be worth paying in enough into pensions to get down to 50K so she receives it again?

arbster

atush wrote: »

Plus having had it in her name, she will continue to receive credits if you opt out for income reasons.
And could be worth paying in enough into pensions to get down to 50K so she receives it again?

So if I opt out of child benefit due to income my wife will still get NI credits until our youngest is 12?

I'm certainly looking at whether I can make a one-off contribution to get my income below £50k - it's not something we could afford to do every year.

jem16

arbster wrote: »

So if I opt out of child benefit due to income my wife will still get NI credits until our youngest is 12?

She must ensure to still claim it even if you choose to opt out of receiving it.

https://www.gov.uk/child-benefit/overview

atush

And yes, you can lower your income and still receive CB if you like. Getting that back would mean it is worth you paying in, even if you might be a HRTpayer on retiring.

Dont forget that this govt is proposing that unused tax allwoances will be able to be swapped in future. Could help if you dont manage to get enough into her pension

arbster

atush wrote: »

And yes, you can lower your income and still receive CB if you like. Getting that back would mean it is worth you paying in, even if you might be a HRTpayer on retiring.

Quick question on making the additional payment into my pension. I need to pay an additional £52k, which I could do as cash, or could do by significantly increasing my salary sacrifice payments from my monthly salary. I'm presuming the latter is the way to go, in order to benefit from the NI rebate too?

If I did choose to pay cash, in order to reduce my gross salary by £52,000, am I right in thinking that I would need to make a payment of £41,600 (80% of 52,000) and then reclaim the remaining overpaid tax in my SA?

jem16

arbster wrote: »

Quick question on making the additional payment into my pension. I need to pay an additional £52k, which I could do as cash, or could do by significantly increasing my salary sacrifice payments from my monthly salary.

The annual limit is £40k. Have you got enough unused allowances from previous years to allow the extra payment? How much is your normal payment plus employer's contributions?

I'm presuming the latter is the way to go, in order to benefit from the NI rebate too?

Seems sensible.

If I did choose to pay cash, in order to reduce my gross salary by £52,000, am I right in thinking that I would need to make a payment of £41,600 (80% of 52,000) and then reclaim the remaining overpaid tax in my SA?

Correct.

arbster

jem16 wrote: »

The annual limit is £40k. Have you got enough unused allowances from previous years to allow the extra payment? How much is your normal payment plus employer's contributions?

Sadly yes - my pension contributions have been somewhat lacking over recent years. The combined contributions have been c. £18k-20k pa so, according to the HMRC website, I have £125,658.00 available allowance including carryover.