Should I put a lump sum in to my pension

Mick-H

I'll try to keep this short.

My wife is due to take flexi retirement in July of this year.
She'll be getting a lump sum and a pension but will continue to work part time up till retirement age in 12 years.

I have an old pension that I have not contributed to in over 15 years.

Can I put part of her lump sum (up to a maximum of £40000) in my old pension?

Am I right in thinking that if I can do the above, I'll get a better return than if I put it in a savings account?

If not where would be the best place to put a lump sum to get a good return?

Cheers in advance.

jamesd

You can pay at least 40k into a pension if you are under 75 years old and you have at least £40,000 of qualifying income this tax year, normally this is PAYE income. Maybe not into the old one, ask them if they will allow it. Not necessarily a bad thing if they won't, a new one will probably be cheaper and with more and better options.

If you have unused annual allowance from the last three years you can carry that forward to allow more than 40k so long as you have enough qualifying income in this tax year. You can't carry forward income from past years, that has to be in this tax year.

There are rules limiting recycling of pension lump sums into pensions in the name of the person who took the lump sum. She should get hers into a bank account in her sole name then give you the money into an account in your sole name to more definitively ensure that it will be fine. If we know more about her own history of pension contributions and lump sum value we could also say whether she can recycle money into contributions to pensions in her own name.

Please say more about the nature of the pension your wife will be getting. I'm mainly interested in confirming that it is a defined benefit pension like final or average salary and that she is not taking it before normal retirement age for the scheme, but also in ensuring that she isn't being corralled into buying an annuity with money from a defined contribution pension.

Knowing more about assets, incomes and your own age and work plans would help us to give more complete guidance and there are often interesting features to benefit from.