Pension health

Dazed_and_confused

One problem for the current tax year is that I don't think you can backdate a claim for Child Benefit for more than 3 months.

pensionConfusion

Thanks a lot guys. That makes a lot of sense.
Is there a max limit one can put in a pension pot in a year?
My wife is 43.
Her company pension pot is forecast to be 600000 at time of retirement (age 60). If she puts in 28k for 17 years (476000)
The pension pot totals to 1,126,000.
Is this right?

Triumph13

pensionConfusion wrote: »

Thanks a lot guys. That makes a lot of sense.
Is there a max limit one can put in a pension pot in a year?
My wife is 43.
Her company pension pot is forecast to be 600000 at time of retirement (age 60). If she puts in 28k for 17 years (476000)
The pension pot totals to 1,126,000.
Is this right?

Add in some investment growth and she's likely to be over the LTA so you'll almost certainly want to scale back well before then. I'd start by looking to do it until your eldest leaves school and re-assess then.
You also need to start building up your own pension provision at least until you have enough to cover your personal allowance in retirement as with sal sac that gives a fantastic return too.

Patrol

While financial arrangements of the spouse could be looked at it doesn't feel like there is sufficient information available to suggest a course of action.

e.g. there is mention of 30k final salary (including state pension so does that mean circa 22k + 8k), and a 600k pot. Does the spouse have both of these, if so the lifetime allowance is already well in sight if not already there. Or is the 600k an estimated transfer value of the final salary. Or is the final salary not a final salary?

pensionConfusion

I suppose a withdrawal at 55 would be a good idea then?
And plan should be sort out the pension for the higher earner. Then look at all in-comings and outgoings to figure out how much I can contribute to my pension.

Triumph13 wrote: »

Add in some investment growth and she's likely to be over the LTA so you'll almost certainly want to scale back well before then. I'd start by looking to do it until your eldest leaves school and re-assess then.
You also need to start building up your own pension provision at least until you have enough to cover your personal allowance in retirement as with sal sac that gives a fantastic return too.

pensionConfusion

I do not have these numbers atm. I will update later after looking at paperwork.

Patrol wrote: »

While financial arrangements of the spouse could be looked at it doesn't feel like there is sufficient information available to suggest a course of action.

e.g. there is mention of 30k final salary (including state pension so does that mean circa 22k + 8k), and a 600k pot. Does the spouse have both of these, if so the lifetime allowance is already well in sight if not already there. Or is the 600k an estimated transfer value of the final salary. Or is the final salary not a final salary?

Triumph13

I would suggest:

1. Put in a backdated claim for child benefit asap as that's potentially £34.40 a week going begging (if you can get Spouse down to £50k) and the only downside if you don't go ahead with that is the need to do a tax return for spouse.
2. FInd out the full details of all spouse's pensions to work out whether or not making extra contributions now will risk hitting the LTA later.
3. Find out the full details of your salary sacrifice scheme and, in particular, whether or not your employer shares any of their NI savings with employees.

Items 2 and 3 are less urgent, just as long as you can be ready to act well before the end of the tax year in April.

GunJack

Or.....

If paying off the mortgage gets your monthly outgoings down to £3k from £5k whilst still leaving £80k-ish, and then look at doing all the pension/savings/investments/child benefit stuff above (and possibly reduce the other £3k per month outgoings) - mortgage-free and lower monthly outgoings means you'll need less income in the future to afford a similar lifestyle and your spouse (and potentially yourself) could also possibly avoid LTA issues...

enthusiasticsaver

I would look to maximise your pension given you have nothing invested now. I would also look at stocks and shares isas over repaying the mortgage both for you and your wife as it looks like her pension will go over the LTA if she maximises hers which already is healthy. She should be looking at ISAS instead.

Obviously though if she intends taking her retirement earlier that will reduce the amount so you need to be looking at when you want to retire and how much you need to live. At the moment you say you have outgoings of £5000 a month but it looks like £2000 of that is the mortgage and overpayment and £1000 is savings so presumably you need closer to £2000 to live as the mortgage will be repaid by then. If you use that £1000 towards holidays etc then you could make it £3000 or £36k per year. Are you sure that you both have full state pension contributions though given you have just returned from working abroad? Have you checked on HM gateway?

If you intend retiring in 22 years time when you are 65 then you have a relatively small gap between retirement and state pension age which will give you around £8500 each (if you have full contributions) or £17000 for both of you. So only around £20k per year to find from private pensions/savings. Obviously your wife has a very good pension so for you I would look to maximise your Personal Allowance at least by aiming for a pension pot of around £400k (assuming 4% withdrawal per annum) and also move some of your savings into stocks and shares isas for you both over the next few years. Making lump sums into your mortgage will obviously also reduce outgoings so I would do that too but maybe not pay it all off in one go so lump sum repayments to maybe repay earlier than 12 years?

atush

The spouse should open a PP or Sipp, any pay in enough to take him out of higher rate tax. Funnel some savings into S&S isas for you both. he will need these two if he wants to retire before his scheme age, without reducing his 30K pension.