Working out a plan

Albermarle

Thanks, can you please explain a bit more where you say he should at least contribute enough that he is effectively not paying higher tax anymore?

If you pay higher rate tax , you get higher rate tax relief on pension contributions .
In simple terms you earn a £100 gross , pay 40% tax so you get £60 net ,
You contribute £60 to a pension and you get tax relief of £40 , so £100 goes in your pension.
( If you say put the £60 in an ISA , it stays as £60)
When you take the £100 out of a pension you get 25% tax free and the rest at normal tax rate . As most people only pay basic rate tax in retirement then it is big advantage to contribute to pensions for a 40% taxpayer.
This is a simplified explanation and there are some rules . If you want a more exact calculation for your OH you would have to supply details of his salary ; how much he contributes to his current civil service? pension and what he expects that pension to pay out and when .
Alternatively you may benefit from a one off meeting/consultation with an IFA.

ostaragirl

Albermarle wrote: »

If you pay higher rate tax , you get higher rate tax relief on pension contributions .
In simple terms you earn a £100 gross , pay 40% tax so you get £60 net ,
You contribute £60 to a pension and you get tax relief of £40 , so £100 goes in your pension.
( If you say put the £60 in an ISA , it stays as £60)
When you take the £100 out of a pension you get 25% tax free and the rest at normal tax rate . As most people only pay basic rate tax in retirement then it is big advantage to contribute to pensions for a 40% taxpayer.
This is a simplified explanation and there are some rules . If you want a more exact calculation for your OH you would have to supply details of his salary ; how much he contributes to his current civil service? pension and what he expects that pension to pay out and when .
Alternatively you may benefit from a one off meeting/consultation with an IFA.

Thank you, I will find out and get back to you.