Pension strategy for higher earners

kidmugsy

TcpnT wrote: »

If she is not earning she is limited a maximum £3600 gross annual pension contribution. There is nothing to stop you gifting any amount of money to her but bear in mind IHT liability if you die within 7 years. However she cannot pay more than £3600 or her earned income, whichever is greater, into a pension

He can gift her £3k p.a. free of fear of IHT, and that's just slightly more than she needs to contribute £3600 gross. More likely he's gifting her other money too but if it's regular gifts from surplus income that's also free of IHT. At least it is at the moment.

Jaguar_Skills wrote: »

If my OH is not working, presumably I can put the full amount into her allowance?

Just a risk as we aren't married.

I smile at the notion that it wouldn't be a risk if you were married.

Snakey

Clifford, do you have any unused annual allowance from earlier years?

I had to stop contributions in early 2016 due to potential LTA issues, my employer lets me have "their" 3% as extra salary so it could be worse. Definitely worth asking.

Pension tax rule changes suck big time - how can you plan for the long term when they keep moving the goalposts? - and the LTA feels particularly unfair since future changes that you can't predict might retrospectively render today's sensible planning sub-optimal, to say the least.

But you can only work with what you know today, and right now breaching the AA and potentially the LTA both at once makes pension contributions a terrible idea.

Unless you cannot get that 7% out of your employer any other way, in which case at least you get a small percentage of something rather than a larger percentage of nothing - although you'll need to factor your own 3% in to that calculation, if that's a requirement to get the 7%.

Jaguar_Skills

I will start a new thread tomorrow as I’ve hijacked this enough.

gadgetmind

greenglide wrote: »

An offer that couldn't be refused?

I was <30 and they made me a millionaire overnight with performance-linked tasty upside. Yeah, young and foolish, but hey.

JoeCrystal

gadgetmind wrote: »

I was <30 and they made me a millionaire overnight with performance-linked tasty upside. Yeah, young and foolish, but hey.

Heh. Young maybe but certainly not foolish... :rotfl: Only a fool would turn down a million pounds!

greenglide

Not necessarily.

If you could turn the £M into, say, £200,000 or more every year it may be worth considering. Especially if there are long term growth possibilities.

gadgetmind

A company that could return £200k pa would be worth a wee bit more than £1m. Plus at age 30 you've got plenty more options for starting other ventures.

andy001

andy001 wrote: »

Just to add some different perspective from other NHS pension dilemma thread: If suppose that OP is in NHS pension and is earning up to 210k. Is it still viable to stay in Pension in above situation?

Any views re NHS Please?
Thanks