Saving for Mothers retirement

cbl1987

Hi All

My brother and I are concerned about out mothers retirement pot and would like to boost it by opening some sort of joint savings account.

out plan is to make regular monthly payments into a fund then hand over to my mother when she hits retirement age.

Firstly is this possible and does anybody have any experience with this type of thing?

Secondly what is the best way to do it, is it simply a matter of setting up a joint savings account or are there ISA-type options as well?

Any advice would be helpful

Regards
CBL

xylophone

My brother and I are concerned about out mothers retirement pot and would like to boost it by opening some sort of joint savings account.

How old is your mother?

Does she have earnings from employment?

What is her current pension provision?

When does she become eligible for state pension?

cbl1987

Hi

She earns approx £22000 per annum

No Idea about her current pension provision, but she has only been paying in 8 years.

She is 8 years from state pension

Zanderman

You should find out about her current work pension - there may be ways to boost that.

And/or she could open another pension independently and you could pay into that (via her) which would increase each contribution by tax relief - essentially boosting the pot by 25% as she's paying 20% tax.

Others will give you better advice than me on pension procedures, but in essence that's what I'd do.

(And check her state pension forecast too)

AnotherJoe

Agreed if you are saving fro her retirement get her to pay more into a pension, either work or private, which you can help with. For example if she pays an extra £100 month in you can pay her £80 (which is more than she'd have got after tax) to help with day to day living.

atush

I agree, ask about her current pension.

I'd set up a DD to her account, so that she can pay more into her pension to boost it.

Albermarle

No Idea about her current pension provision, but she has only been paying in 8 years.

She is 8 years from state pension

You only mention her current pension provision, does she have any pensions from previous employers ? If so you need to dig out the details on those .
If her current employer pension does not allow additional/increased contributions ( although they probably will ) then maybe you can add to one of the older ones instead.
It might seem a bit more complicated with pensions than just a monthly savings account but due to the tax relief it is the best route to improve her retirement pot.

xylophone

She is 8 years from state pension

Has she checked state pension forecast?

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

Is her current workplace pension Defined Benefit or Defined Contribution?

If she is in her late fifties it is very possible that she has pensions from previous employment(s) - has she checked?

Is she entitled to any form of spouse pension?

Can she make additional contributions to her current pension scheme?

When does she want to give up work?

Zanderman

A couple of thoughts following up my earlier comments:

Re-reading your opening post I realise you may not want to tell her you're doing this - only presenting her with the savings at retirement. If that's the case then pension contributions would be difficult! As you'd need her to be paying them. But pension contributions would give an instant 25% uplift in value due to tax relief, so it's well worth it.

Also, I realise you're talking about savings, not invested money. And you may be nervous about invested money (which pensions are by definition). But on the timescale you're talking (8 years if she works until SP age) this should be fine so probably not something to worry about.

If you were worrying about that though you could suggest she opens a SIPP pension that allows money to stay in as cash. Hargreaves Lansdown for example allow this, and though their interest rate for cash is dire it does at least become 25% bigger on getting tax relief, so still beats most savings accounts, even over a period of several years.

But as said earlier, others can give much better pension advice than me. So listen to others! Including all the comments above about tracking down any previous pensions, checking state pension forecast etc.