Advice please

happymum37

MX5huggy said:

Pension and/or LISA before you are 40. 

https://www.moneysavingexpert.com/savings/lifetime-isas/

You have enough savings to pay off the majority of the mortgage should interest rates rise significantly.

Would you suggest a lisa rather than put it into our pensions? 

Thank you

happymum37

TVAS said:

The person who is gong to produce the better pension on full time earnings should be the one working and the other should be the carer. This looks like you should return to work full time as you have a DB pension. He will only be giving up a 3% employer cont (reduced to to pro rata for part time work. Have you considered this?

Thank you for the reply. 
For us it would only be me part time as we both feel I'm best at the childcare

happymum37

Marcon said:

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Well, having read the thread you started 3 months ago saying you wanted to be mortgage free in 7 years...just wondered why something that was such a burning ambition so recently isn't quite so high on the shopping list now? I think you're right to consider sloshing some extra cash into your pension, so why not do both? Then the decision is simply how much in which...

Thank you. 

We were all guns blazing to be mortgage free then my in-laws got very ill very quicky.  We want/have to spend more time caring so we will have far less time to do overtime at work.  We also may need to assist them financially to get their house disabled friendly. 

We are thinking of pouring husbands contributions in his pension up to 10% which is an extra £100 from him and £150 per month into mine.... We can't over pay mine until next tax year it seems die to policy rules

Thank you

LHW99

happymum37 said:

LHW99 said:

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Interest rate on the mortgage is one factor. But don't forget to check what would happen to the survivor in each case, given your current positions, because state pensions are now mainly not inheritable, so that could be quite a drop in survivor income. Also, you need enough pension to be able to use up all your tax free allowance (as well as him using his).

Thanks for the reply.  Mortgage rate is 0.85

We have life insurance that would mean the survivor would have no mortgage and not need to work ever ever again.  

What is the tax free allowance please? I'm basic rate tax payer so is he

Thank you

Everyone has a tax-free allowance of £12500 (2020-21) and a bit more this next financial year.

So if you were to retire this year, you could have that amount of income from whatever pension before you started paying tax (you get it allowed against your earned income too, so currently you only pay basic rate on your wages above that level).

It means that pension-wise, a couple could have £25k income between them, and if it is evenly split, they pay no tax. With DC pensions there is also the 25% tax free lump sum (and equivalent from a DB).

The actual allowance will be different by the time you retire, but the principle would be the same.

happymum37

LHW99 said:

happymum37 said:

LHW99 said:

happymum37 said:

Marcon said:

Maybe having a chat with your husband and agreeing what you are trying to achieve would be the best first step, and could avoid a lot of marital conflict! If you aren't clear about your goals, how can you possibly plan how best to achieve them? 

Lol he will let me do what ever I want. So the pressure is on me to make the right decision!!!

Interest rate on the mortgage is one factor. But don't forget to check what would happen to the survivor in each case, given your current positions, because state pensions are now mainly not inheritable, so that could be quite a drop in survivor income. Also, you need enough pension to be able to use up all your tax free allowance (as well as him using his).

Thanks for the reply.  Mortgage rate is 0.85

We have life insurance that would mean the survivor would have no mortgage and not need to work ever ever again.  

What is the tax free allowance please? I'm basic rate tax payer so is he

Thank you

Everyone has a tax-free allowance of £12500 (2020-21) and a bit more this next financial year.

So if you were to retire this year, you could have that amount of income from whatever pension before you started paying tax (you get it allowed against your earned income too, so currently you only pay basic rate on your wages above that level).

It means that pension-wise, a couple could have £25k income between them, and if it is evenly split, they pay no tax. With DC pensions there is also the 25% tax free lump sum (and equivalent from a DB).

The actual allowance will be different by the time you retire, but the principle would be the same.

Thank you i have screen shot that!

chiefie

If you are working 18 hours I assume you are a lower rate taxpayer. If your husband isn't it's effective for him to contribute more into a pension until it brings him within the lower rate band. I did a bit of both - mortgage and pension. If I were to go back I would do all pension - but I didn't feel as secure in my employment then. 

TVAS

This is not really a question for a forum you can find this answer on Google. 

LHW99

Although there are things you probably don't want to go and find out on Google unless you are very careful and (preferably) know how best to phrase your question.

Factually Google will help, but on many questions asked here by more and less experienced participants - there can be multiple answers to be evaluated and it can be helpful getting a range of replies and thoughts, as well as the facts, and throw them all into the pot in order to come to a decision.

Albermarle

LHW99 said:

Although there are things you probably don't want to go and find out on Google unless you are very careful and (preferably) know how best to phrase your question.

Factually Google will help, but on many questions asked here by more and less experienced participants - there can be multiple answers to be evaluated and it can be helpful getting a range of replies and thoughts, as well as the facts, and throw them all into the pot in order to come to a decision.

Hear Hear !

MallyGirl

since you are both basic rate tax payers then there is no great advantage to paying into one or other's DC pension. If your return to work is back in the police then it is a bit more complex.
Assuming straight DC, if you are both retired and you want to take out £25k a year then if you both have equal sized pension pots you can get £12500 tax free each year (ignoring the 25% tax free lump sum for the moment). If his pension has the lion's share of the money so you cannot get £12500 out of yours then he will pay some tax for taking more than £12500 out of his. Equalising will help avoid tax. If you are young enough for a LISA then start one to give more options.