Utilising Spouse's pension allowance

MIZZ12

Hi, I am a 50 yr old employed higher rate tax payer and my husband is a 40 yr old self-employed basic rate tax payer.   I have a very reasonable employer's pension which I pay into every month.  My husband set up a Scottish Widows pension years ago but hasn't paid into it for a couple of years.  When I recently spoke to a financial advisor (he called me out of the blue, so I wasn't actively seeking advice), he briefly explained  "I would likely be looking to utilise pension allowances for your Husband (being self-employed, often very little use of this tax efficient wrapper gets made and you can pay up to 100% of what is earned each tax year into a pension FYI) and this can also bring considerable tax benefits".  Now it's got me thinking as I had never even considered this before.  I am not a big fan of pensions as a savings vehicle in general, but there is no denying their tax efficiency, and I am currently looking for ways to invest cash which is currently not doing much; I am already looking to utilise my ISA allowance, so this is over and above that.  I was wondering whether the general consensus is that I am perhaps missing a trick here and whether I probably should utilise my husband's pension allowance.  Basically, I would like to know:-
1) What are the main things I should consider on helping me to decide whether or not to pay into a pension on his behalf/utilise his pension allowance, and
2) If I do go down this route, what is the best way to go about setting this up ?
Thank you in advance !

Albermarle

When I recently spoke to a financial advisor (he called me out of the blue, so I wasn't actively seeking advice)

Reputable financial advisors do not call anybody out of the blue . So first point is whatever you decide to do , have no more contact with this person. Probably they want you to invest in a pension but with dodgy investments within it.

Apart from that are you as a higher rate taxpayer paying enough into your workplace pension to gain maximum higher rate tax relief.?

MIZZ12

Thanks for your reply Albermarle - I probably should have explained that the financial advisor was a actually a relationship manager from my Bank just touching base, but also seeing whether he could offer me financial advise - so no, nothing dodgy!!

molerat

MIZZ12 said:

....... was a actually a relationship manager from my Bank ................

How many different names can you give a salesman ?

dunstonh

Thanks for your reply Albermarle - I probably should have explained that the financial advisor was a actually a relationship manager from my Bank just touching base,

So, not a financial adviser then?  

Most banks pulled out of financial advice in 2013 when it ceased to be profitable for them.  Banks had a history of basic advice using expensive and poor quality products and investments.  Some have started to re-enter the market again but the cost is still pretty high.   Things always seem to go in cycles.

being self-employed,

Is he self employed or is a shareholder/director of own his own limited company? (it makes a big difference)

I am not a big fan of pensions as a savings vehicle in general,

Why?

I am already looking to utilise my ISA allowance

Pensions are just at a tax wrapper like ISAs. The same investments and the same charges.  Just different taxation and maturity process. 

1) What are the main things I should consider on helping me to decide whether or not to pay into a pension on his behalf/utilise his pension allowance

What is the best tax wrapper to use for the objectives for the investment? 

2) If I do go down this route, what is the best way to go about setting this up ?

Not using the bank.

zagfles

As you pay higher rate tax it might be worth considering paying more into your pension first, assuming you're not already close to the annual allowance or risk going over the lifetime allowance.

Dox

MIZZ12 said:

Basically, I would like to know:-
1) What are the main things I should consider on helping me to decide whether or not to pay into a pension on his behalf/utilise his pension allowance, and
2) If I do go down this route, what is the best way to go about setting this up ?
Thank you in advance !

1. His views and wishes would be no bad starting point.
2. Proper advice from an IFA.

Clive_Woody

molerat said:

MIZZ12 said:

....... was a actually a relationship manager from my Bank ................

How many different names can you give a salesman ?

I can think of many....but I may well be banned from MSE if I list them here 

coyrls

molerat said:

MIZZ12 said:

....... was a actually a relationship manager from my Bank ................

How many different names can you give a salesman ?

I don't know but many will include the word "consultant".

eskbanker

coyrls said:

molerat said:

MIZZ12 said:

....... was a actually a relationship manager from my Bank ................

How many different names can you give a salesman ?

I don't know but many will include the word "consultant".

....and at least one will only use 40% of those letters

MIZZ12

Dox, gosh really helpful.  Thanks so much for your valued insights.