Is it time to slow down on the saving and start spending a little more

Nebulous2

squirrelpie said:

As well as the excellent suggestions people have already made, I'd like to offer one more thought. It's generally regarded as a good idea for both partners to have reasonable pensions, rather than concentrating it mostly on one partner. That can reduce the overall tax bill and increase the amount that can be saved and can be more resilient to various changes of circumstances.

So while your partner is not working, it's worth paying £2880 into her SIPP (which will be grossed up to £3600), and when she starts working it will be worth paying whatever she earns into her SIPP (such that when grossed up by the government it matches her total earnings).

That's where we are at - at least until state pension age.

I was the main earner, often the only earner. There wasn't really an opportunity to pay £2880 into a SIPP until recently. My wife now has 3 years worth in it, but hasn't drawn from it yet. 

She will start a small DB pension this year, but still will be well within her personal allowance. 

Meantime I'll be paying about £3k in income tax, between my DB pension and part-time earnings. 

Mistermeaner

Hi all thanks for comments - thoughts;

- don’t see benefit in paying into missus pension, if we’re putting into pension may as well be mine for full HR tax relief… she’ll be going back to work soon anyway and has years to go (5 years younger than me)  

- agree having more in isa will give us early retirement flexibility, just got to get round missing out on all that lovely tax relief!

- given kids ages unlikely I’ll retire early (but who knows) 

in conclusion I think we’ll limit pension savings to 20k per year, see what that does to take home pay and put around 50% of the excess (vs today) into Isas 

will also start spending a bit more on family time holidays experiences etc 

thanks all for input 

Pat38493

Mistermeaner said:

- don’t see benefit in paying into missus pension, if we’re putting into pension may as well be mine for full HR tax relief… she’ll be going back to work soon anyway and has years to go (5 years younger than me)  

I think generally the idea is about tax management on the way out - she is not in any LTA risk and any pension assets in her name will use a separate income tax allowance.  Granted though - while she is not working it's probably not going to make a huge difference in the grand scheme of things.  Not to use money you were going to put into your own pension for that but maybe money you were going to put in an ISA - she can put it in an ISA in her name anyway.

In fact, when she starts working you might want to consider having her put a large portion of her money into a pension and then you give her some of your "spare" money and manage the assets as a couple.

Anonymous101

Pat38493 said:

Mistermeaner said:

- don’t see benefit in paying into missus pension, if we’re putting into pension may as well be mine for full HR tax relief… she’ll be going back to work soon anyway and has years to go (5 years younger than me)  

I think generally the idea is about tax management on the way out - she is not in any LTA risk and any pension assets in her name will use a separate income tax allowance.  Granted though - while she is not working it's probably not going to make a huge difference in the grand scheme of things.  Not to use money you were going to put into your own pension for that but maybe money you were going to put in an ISA - she can put it in an ISA in her name anyway.

In fact, when she starts working you might want to consider having her put a large portion of her money into a pension and then you give her some of your "spare" money and manage the assets as a couple.

Especially if she can contribute via Sal Sac where the difference between higher and regular rate tax payers is only 10%.

Regardless it’s worth OP contributing to keep his salary below £100k due to the personal allowance forfeit above that.