Advice needed

WillJumps

We have twins, they just started university. I have been budgeting carefully for years, putting aside money for a future car, electrical goods as and when, vacations etc. Recently I switched surplus funds to covering maintenance living costs for the children at university - providing an allowance to make up their maintenance loan to something reasonable .....

I am now reaching the point where I have some surplus cash emerging and once I have covered the cost of maintenance over 3 years will have surplus from our monthly income.

I also recently stopped a FSVC as it looks like my own pension contributions will go over the Lifetime allowance.

However, my wife is a teacher and her pension needs bolstering up. We have found working with the teacher pension scheme incredibly difficult to either buy years or increase AVCs.

It makes sense to me that if we can bolster my wife's pension in some way we will optimize savings / future pension. An old IFA has said just invest in ISAs. it's simpler and the maths tends to even out on returns.

What do people think?

Will

dunstonh

An old IFA has said just invest in ISAs. it's simpler and the maths tends to even out on returns.

The problem with seeing people who no longer are active in the industry is that their knowledge becomes dated. Until 2015, ISAs trumped pensions for basic rate taxpayers. That is no longer the case.

What do people think?

Pension is likely to be better (but with caveats based on limited info). Whether its your or your wife will depend on things like current tax position, future tax position whilst working. Tax position in retirement, state pension provision (thinking personal allowance use here) and a few other things.

xylophone

Have both you and your spouse obtained new state pension forecasts?

https://www.gov.uk/check-state-pension

However, my wife is a teacher and her pension needs bolstering up. We have found working with the teacher pension scheme incredibly difficult to either buy years or increase AVCs.

Can you elaborate?

https://www.teacherspensions.co.uk/employers/managing-members/contributions/flexibilities/additional-pension.aspx

https://www.teacherspensions.co.uk/members/faqs/working-life/additional-voluntary-contributions.aspx

https://www.pru.co.uk/pdf/TAVK0789.pdf

There seems to be plenty of information available.

Otherwise she might investigate starting a personal pension - if a 40% tax payer she would need to contact HMRC concerning higher rate tax relief.

AnotherJoe

WillJumps wrote: »

It makes sense to me that if we can bolster my wife's pension in some way we will optimize savings / future pension. An old IFA has said just invest in ISAs. it's simpler and the maths tends to even out on returns.

It doesn't. Worse case, and its unlikely to be that bad, you get back more than 6% than you put in (aside any investment differences)

Best case you will be 20% better off.

WillJumps

Thanks everyone. Useful links which I will look up. I am thinking we will have another go at accelerating buying years on her pension and then look into additional contributions. I know my pension is forecast to go over the Lifetime allowance and hence I stopped a FSVC which frees up money we can re-direct for my wife.

enthusiasticsaver

I think it depends on tax position as pensions are taxable and isas aren't. Having said that of course pensions are boosted by the tax relief going in. She can do the teachers avc scheme or buy added years or even open a separate SIPP. It is worth persisting with the administrators.

atush

WillJumps wrote: »

We have twins, they just started university. I have been budgeting carefully for years, putting aside money for a future car, electrical goods as and when, vacations etc. Recently I switched surplus funds to covering maintenance living costs for the children at university - providing an allowance to make up their maintenance loan to something reasonable .....

I am now reaching the point where I have some surplus cash emerging and once I have covered the cost of maintenance over 3 years will have surplus from our monthly income.

I also recently stopped a FSVC as it looks like my own pension contributions will go over the Lifetime allowance.

However, my wife is a teacher and her pension needs bolstering up. We have found working with the teacher pension scheme incredibly difficult to either buy years or increase AVCs.

It makes sense to me that if we can bolster my wife's pension in some way we will optimize savings / future pension. An old IFA has said just invest in ISAs. it's simpler and the maths tends to even out on returns.

What do people think?

Will

I think ISAs are great, but pensions can be better. for the OH as provision is low so far and for you if you are paying HRTax