Help please on savings and investments

Dazed_and_confused

I'd pay it into your pension rather than hers. You get 40% tax relief that way.

Are you sure about that? It isn't clear from this thread exactly what the husband's taxable income is and it seems plausible that it is already low enough that 40% relief wouldn't be due on all of any additional pension contribution.

NStephanie83

£3k a year us isn't much out of a salary of £50k and unless you've missed a zero off of your own pension pot, £6500 is miles behind where it should be aged 35.

Sadly this is correct number. However 3k is my contribution which will be matched by the employer so overall 6k.

I sense that you are having difficulty in finding a SIPP provider...

True - struggling

Alexland

NStephanie83 wrote: »

True - struggling

If you want a simple no-maintenance pension for the wife have you considered the Aviva Stakeholder pension which you can apply for via Cavendish?

https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

https://www.aviva.co.uk/stakeholder-pension/

On the application form you can setup a £240 per month direct debit from a joint bank account and every month they will invest £300 into the global markets pre-funding the government contribution which they will collect for you. Then later in life the account holder has the option of using the money to buy an annuity for guaranteed regular income or transferring into a SIPP for income draw down. This account is very easy to view online and uses the same MyAviva login as their car insurance! If the wife currently has no pension then much of this is likely to be drawn tax free in retirement.

Or as an alternative get a Lifetime ISA in which they will get the same government 25% contribution and there will definitely be no tax to pay in retirement however the access date is later and the best S&S LISA providers HL and AJ Bell are more complicated to operate. Nutmeg offer a nice simple S&S LISA but their future is uncertain as they are loss making.

We are each doing both pensions and LISAs and using my pension contributions to suppress my income to get child benefit and avoid 40% tax. The only downside is that my pension projections are heading towards the lifetime allowance but I guess that's a nice problem to have.

Make sure the child benefit is in the wife's name so she gets NI credits towards the state pension. Also if you suppress the husband's income enough marriage allowance may come into play?

Alex.

JmeS

If you sacrificed more salary to drop husbands income to a lower rate tax payer, you could also take advantage of the Marriage tax allowance?

NStephanie83

Thanks to all the forums helpers, just a quick update since my original post:

No credit cards

We now have a Asda credit card paying 1% cashback on shopping at Asda.

Consider over-paying into your mortgage

Will do this from April onwards

All money is in a single bank account paying 0.25% interest

£2500 in Nationwide at 5%,
£1500 in TSB Classic Plus at 2.99%
and rest still at 0.25% - need to find other options here.

£2,880 a year in to a stakeholder pension

Not started yet as I don't want to lock money away for 20 years. Will revisit this in April though. I am aware I will lose tax relief in this tax year.

She is in receipt of Child Benefit?

Form filled, will post soon

Tourism + Social Events + Eating Out = 4000 per year, which is around 77 per week

Not looked into this yet.

Also I have put in £500 in Vanguard Target Retirement 2025 Fund, hoping that it will give me some good returns, although it is falling down at the moment.

Please can someone advise and also comment on our current expenditure as stated in original post, looking forward to help.