Utilising Spouse's pension allowance

MIZZ12

dunstonh said:

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?   No, he is a relationship manager offering me the Bank's Financial advice service 

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) He is a self-employed maths tutor

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

Why? I guess the main reason being their restrictive nature and the fact that the government is always changing the rules around when you can and can't access your own money.  

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. Agreed

Thanks dunstonh - I have added my responses to your qns in the body of your text above.  Looks like the best course of action for me would probably be to engage an IFA 

LHW99

He is a self-employed maths tutor

Not using the bank. Agreed

I also agree with the second comment.

I have done the first myself - I'm not sure it makes you a better salesman, I am 100% sure it takes more than that to make you a good (I)FA.

NedS

As others have noted, one of your first considerations should be to ensure you are making enough of your own pension contributions to ensure you are not paying high rate tax.

Once you have done that, paying into a partner's pension can have a couple benefits. Firstly, if you have reached or are near reaching any of the limits on how much you can pay into your own pension, and you still have additional cash you would like to invest into a pension wrapper, then using a partner's unused allowance is a great way to do this. The other benefit can be on the way out (when drawing the pension), if the partner will not have sufficient income in retirement to fully utilise their tax free allowance then any contributions may well attract tax relief on the way in and be tax free on the way out increasing your overall tax efficiency. For example, my partner no longer works and will have a small DB pension of £4k available at 60 followed by full state pension at 67. From 55-67 she will not be fully utilising her tax free allowance so I am contributing enough into a SIPP for her now to make sure she can withdraw tax free during those years and (more) fully utilise her tax free allowance. She benefits from the tax relief on the way in and it's tax free on the way out for her. Any income is always best split over two tax allowances if possible and a bit of planning may be required where your retirement income is not evenly split between both partners.