Pension advice LGPS, Stakeholder Pension and Wife's Pension

homersimpson246

Hi

I'm looking for some advice, I have a stakeholder pension that i've had since the early 2000's, I used to contribute about 10% of my salary to it after tax but in the last 7 years I have only paid in around £75 per month as I joined the LGPS with a change of job.

Just before this my wife stopped working when we had our first child although we still pay around £75 per month into her stakeholder pension as well.

My concern is that while I have a two good pension pots my wife doesn't and although I belive the LGPS does pay out some percentage to a spouse i'm wondering if it would be better to stop paying into my stakeholder pension altogether and pay the additional into my wifes pension so that if anything happens to me its all in her own name and I would have my LGPS and my stakeholder pension for the bit i've paid into so far.

I'm 40 and my wife is 37 and my LGPth pension is work around 7K per annum and my stakeholder pension pot is around 60K.  My wifes on the other hand is only around 8K.

Any advice would be appreciated and of course whether there is a better type of pension now other than  the stakeholder pension that we would be better off looking into?

QrizB

I don't know how your household finances are but, if your wife isn't working, you might want to boost her pension contributions to £240 per month which is the most she can receive tax relief on.

Also check how your stakeholder pensions are invested, what the charges are and whether you'd be better off transferring them to a different scheme with lower charges and better investment options.

Dazed_and_C0nfused

I'm 40 and my wife is 37 and my LGPth pension is work around 7K per annum 

What exactly do you mean by this?

Marcon

homersimpson246 said:

Hi

I'm looking for some advice, I have a stakeholder pension that i've had since the early 2000's, I used to contribute about 10% of my salary to it after tax but in the last 7 years I have only paid in around £75 per month as I joined the LGPS with a change of job.

Just before this my wife stopped working when we had our first child although we still pay around £75 per month into her stakeholder pension as well.

My concern is that while I have a two good pension pots my wife doesn't and although I belive the LGPS does pay out some percentage to a spouse i'm wondering if it would be better to stop paying into my stakeholder pension altogether and pay the additional into my wifes pension so that if anything happens to me its all in her own name and I would have my LGPS and my stakeholder pension for the bit i've paid into so far.

I'm 40 and my wife is 37 and my LGPth pension is work around 7K per annum and my stakeholder pension pot is around 60K.  My wifes on the other hand is only around 8K.

Any advice would be appreciated and of course whether there is a better type of pension now other than  the stakeholder pension that we would be better off looking into?

It does - and establishing what your wife would get if you die before her (whether while you are still working, or after you leave 'active' membership of the LGPS) would give you both some reassurance.

Are you a higher rate taxpayer?

homersimpson246

Dazed_and_C0nfused said:

I'm 40 and my wife is 37 and my LGPth pension is work around 7K per annum 

What exactly do you mean by this?

Sorry mistyped this bit, my LGPS pension is worth around 7K per annum at retirement (its index linked).  This will increase the longer I stay in the scheme.

homersimpson246

Marcon said:

homersimpson246 said:

Hi

I'm looking for some advice, I have a stakeholder pension that i've had since the early 2000's, I used to contribute about 10% of my salary to it after tax but in the last 7 years I have only paid in around £75 per month as I joined the LGPS with a change of job.

Just before this my wife stopped working when we had our first child although we still pay around £75 per month into her stakeholder pension as well.

My concern is that while I have a two good pension pots my wife doesn't and although I belive the LGPS does pay out some percentage to a spouse i'm wondering if it would be better to stop paying into my stakeholder pension altogether and pay the additional into my wifes pension so that if anything happens to me its all in her own name and I would have my LGPS and my stakeholder pension for the bit i've paid into so far.

I'm 40 and my wife is 37 and my LGPth pension is work around 7K per annum and my stakeholder pension pot is around 60K.  My wifes on the other hand is only around 8K.

Any advice would be appreciated and of course whether there is a better type of pension now other than  the stakeholder pension that we would be better off looking into?

It does - and establishing what your wife would get if you die before her (whether while you are still working, or after you leave 'active' membership of the LGPS) would give you both some reassurance.

Are you a higher rate taxpayer?

No not a higher rate take payer, I need to look at what she would get but as its only  going to be part of what I would get it does seem to make sense to try and  spread the pensions across both of us so that together we get the full amount and then we each have our own pension and part of the others pension when one of us dies.

homersimpson246

QrizB said:

I don't know how your household finances are but, if your wife isn't working, you might want to boost her pension contributions to £240 per month which is the most she can receive tax relief on.

Also check how your stakeholder pensions are invested, what the charges are and whether you'd be better off transferring them to a different scheme with lower charges and better investment options.

Thanks I will have a look at what the fund charges are and investement options, we can't really afford to increase the amount we pay into pensions, at the moment my contribution and my employers contribution to the LGPS is around 20% of my salary P.A. and on top of this we are paying another £150v split between us into private pensions. 

OldBeanz

homersimpson246 said:

QrizB said:

I don't know how your household finances are but, if your wife isn't working, you might want to boost her pension contributions to £240 per month which is the most she can receive tax relief on.

Also check how your stakeholder pensions are invested, what the charges are and whether you'd be better off transferring them to a different scheme with lower charges and better investment options.

Thanks I will have a look at what the fund charges are and investement options, we can't really afford to increase the amount we pay into pensions, at the moment my contribution and my employers contribution to the LGPS is around 20% of my salary P.A. and on top of this we are paying another £150v split between us into private pensions. 

The main benefit of the LGPS AVC is to draw it as you draw your pension. It is included as part of the valuation as a whole. The amount is worked out as being 20 times your yearly pension divided by 3; £7k*20/3. So at today's values you could draw £42k from the pension tax free. So tax free from taxable income.
Assuming your wife does not work then she can draw £16.6k pa tax free as well 10 years before her state pension kicks in (then £4k ish thereafter).
She may find lower charges in a SIPP and the SIPP would be more flexible than the AVC.

homersimpson246

OldBeanz said:

homersimpson246 said:

QrizB said:

I don't know how your household finances are but, if your wife isn't working, you might want to boost her pension contributions to £240 per month which is the most she can receive tax relief on.

Also check how your stakeholder pensions are invested, what the charges are and whether you'd be better off transferring them to a different scheme with lower charges and better investment options.

Thanks I will have a look at what the fund charges are and investement options, we can't really afford to increase the amount we pay into pensions, at the moment my contribution and my employers contribution to the LGPS is around 20% of my salary P.A. and on top of this we are paying another £150v split between us into private pensions. 

The main benefit of the LGPS AVC is to draw it as you draw your pension. It is included as part of the valuation as a whole. The amount is worked out as being 20 times your yearly pension divided by 3; £7k*20/3. So at today's values you could draw £42k from the pension tax free. So tax free from taxable income.
Assuming your wife does not work then she can draw £16.6k pa tax free as well 10 years before her state pension kicks in (then £4k ish thereafter).
She may find lower charges in a SIPP and the SIPP would be more flexible than the AVC.

I'm not sure that I understand, I pay into the LGPS for work but I don't make any additional voluntary contributions to this.

I still pay £75 per month into my old Scottish Widows Stakeholder pension scheme and my wife pays the same into her Aviva Scheme.

My LGPS pension is worth 1/49th of my salary for every year I work there hence 7 years is about 7K for me.

OldBeanz

homersimpson246 said:

OldBeanz said:

homersimpson246 said:

QrizB said:

I don't know how your household finances are but, if your wife isn't working, you might want to boost her pension contributions to £240 per month which is the most she can receive tax relief on.

Also check how your stakeholder pensions are invested, what the charges are and whether you'd be better off transferring them to a different scheme with lower charges and better investment options.

Thanks I will have a look at what the fund charges are and investement options, we can't really afford to increase the amount we pay into pensions, at the moment my contribution and my employers contribution to the LGPS is around 20% of my salary P.A. and on top of this we are paying another £150v split between us into private pensions. 

The main benefit of the LGPS AVC is to draw it as you draw your pension. It is included as part of the valuation as a whole. The amount is worked out as being 20 times your yearly pension divided by 3; £7k*20/3. So at today's values you could draw £42k from the pension tax free. So tax free from taxable income.
Assuming your wife does not work then she can draw £16.6k pa tax free as well 10 years before her state pension kicks in (then £4k ish thereafter).
She may find lower charges in a SIPP and the SIPP would be more flexible than the AVC.

I'm not sure that I understand, I pay into the LGPS for work but I don't make any additional voluntary contributions to this.

I still pay £75 per month into my old Scottish Widows Stakeholder pension scheme and my wife pays the same into her Aviva Scheme.

My LGPS pension is worth 1/49th of my salary for every year I work there hence 7 years is about 7K for me.

With your Scottish Widows pension 25% will be tax free. If you were investing in an LGPS AVC and can take it with your main pension then all or most of it (within high limits) will be tax free. Worth investigating.