Pension at 55 and working

biscuit1_2

Hi all i have decided to take my pension at 55 and carry on working, i have another pension i am leaving till 65. I have just had a letter back saying i have to then join the new pension scheme my company has but i want invest more in the wife's pension fund as she never had a private pension. Does anyone one know the reasoning behind me having to then join another pension is it a legal requirement.
Cheers all

mania112

It's a legal requirement for your company to set up a pension scheme and put you in it if you're assessed to be an eligible jobholder.

You can decide to opt-out once you're in.

If you decide to contribute to your wife's pension instead, consider the fact you'll be giving up free money from your employer.

cheesetoast

You have to be opted in, but you can opt out within, I believe, 3 months and get your contributions back. But as mania112 says, you'll need to weigh up losing your employer's contributions vs any income tax advantage attached to your wife having the pension.

biscuit1_2

I know i am losing out as far as company contributions, but i will already get state pension and 2 company pensions which takes me over £11000 tax allowence while the wife will only be drawing state pension so i thought it would make more sense to contribute to her's instead.me having another pension

Ganga

As the money total is both yours ( you and your wife ) will you not be better off putting both yours and your employers free money into your scheme and when you both retire juggle the tax allowance between you and your wife to keep your tax threshold down?

biscuit1_2

And if i peg it just after retirement she only gets some of mine and state pension where if she had her own pension would she not be better off

mania112

If you enter an income drawdown plan with your pension money in retirement - your wife will inherit whatever is in the kitty when you die, tax free.

biscuit1_2

No it's final salary

Triumph13

What percentage goes to the surviving spouse on the employer's scheme? If it's 50% then the odds are that she will still be much better off even if you do cash in your chips early as the employer is generally footing well over half the bill on a DB scheme.

atush

Join the new company pension.

And open a personal pension for the OH. Does she work? If so, she can put in up to her entire salary each year.

If not, she can put in 2880/year and it will be grossed up to 3600.

Try to do both. But do beware taking your pension now while working, if you are going to take mroe than th 25% TFLS. AS it will restrict you to 10K per annum contributions, which is easy t go over if now one is a final salary type pension.

kidmugsy

Consider the following: make the contributions to the employer scheme, harvesting the employer's contribution. If later in life you regret it, get a quotation for the Cash Equivalent Transfer Value, and transfer it into a personal pension. Then if you die first the remainder of that can be passed to your widow.

Your idea of contributing to a pension for your wife is also a good one. Is she 55 or over? If so she would have instant access to money in a personal pension. In that case it would be well worthwhile to consider contributing to her pension using money from your savings: ISAs or whatever.