Pension or savings account

JuzaMum

My husband is nearly 60, he has a small pension pot (I will only have state pension). We are currently able to save regular amount each month. Would this be best going into his pension or into a regular savings account?

Emmia

Are either or both of you still working? And if you are does your employer offer a pension you could pay into, saving the tax?

Reed_Richards

A pension would be the most favourable option if your husband will get an employer contribution and/or he pays income tax at the higher rate

JuzaMum

Emmia said:

Are either or both of you still working? And if you are does your employer offer a pension you could pay into, saving the tax?

I don't work as I'm a full time carer. He is still working

JuzaMum

Reed_Richards said:

A pension would be the most favourable option if your husband will get an employer contribution and/or he pays income tax at the higher rate

He's a lower rate tax payer

Janie2008

You can put £2880 a year into a SIPP as a non earner and get £720 tax relief. If you're over 55 you can withdraw it whenever you want and you can leave it in cash, you don't have to invest it.

dunstonh

Pension trumps savings account easily due to tax relief.    Even if fully taxed at basic rate on withdrawals, it is still a 6.25% gain over alternatives before you even look at returns.

Albermarle

JuzaMum said:

Emmia said:

Are either or both of you still working? And if you are does your employer offer a pension you could pay into, saving the tax?

I don't work as I'm a full time carer. He is still working

If he added more to his workplace pension would his employer add more ? Some will up to a point.

DeLaSole

Hi JuzaMum,

Have you both checked your State Pension forecasts?

Best wishes.

Dazed_and_C0nfused

Janie2008 said:

You can put £2880 a year into a SIPP as a non earner and get £720 tax relief. If you're over 55 you can withdraw it whenever you want and you can leave it in cash, you don't have to invest it.

This seems a great option for you as you could potentially get £720 free money each year for a few years and then gradually withdraw it all without pay much, if any, tax.

JuzaMum

Thank you everyone. It looks like putting into a pension is best, we will have to look into the best way to do this. We've checked our state pensions, I have a few years to get to the maximum but get credits due to receiving carer's allowance so should be there before retirement age.