Pension for a carer

Trommusic1

Should I put some cash into my dormant private pension. I'm a carer for my daughter, thought I'd be back at work by now. I'm worried that I'm not putting anything into a pension. I will qualify for the state pension in 7 years time. Or would I be better off with a savings account. Or for my husband to increase his pension contributions through his salary.

Marcon

Trommusic1 said:

Should I put some cash into my dormant private pension. I'm a carer for my daughter, thought I'd be back at work by now. I'm worried that I'm not putting anything into a pension. I will qualify for the state pension in 7 years time. Or would I be better off with a savings account. Or for my husband to increase his pension contributions through his salary.

Check your state pension forecast and if necessary look at filling any 'missing' years before doing anything else: https://www.moneysavingexpert.com/savings/voluntary-national-insurance-contributions/

A pension is a savings account, albeit a complicated one. If you have no earnings/potentially taxable benefits, you can contribute up to £2,880 to a personal pension of your choice and get basic rate tax relief added to your 'pot', even though you've not paid any tax in the first place, so it scores over an ISA in that respect.

If your husband is a higher rate taxpayer, then increasing his contributions would mean he'd get full tax relief on them as opposed to just basic rate, so it MAY be a better option, especially if his employer would increase their contributions too.

dunstonh

Should I put some cash into my dormant private pension.

Pensions do not go dormant.  That only applies to bank accounts.   The pension remains invested and subject to daily valuation changes.

You have given us three options (you, your husband or savings).  However, you haven't given any details that allow us to understand your scenario and which of those may be best.   You can probably eliminate savings as that is the less tax efficient of the too and savings are generally not a good idea for long term retirement planning.    You paying something is a good idea.  However, if your spouse is a higher rate tax payer then it may be better for them.  There is also the potential for a lifetime ISA as an option.

Marcon

dunstonh said:

Should I put some cash into my dormant private pension.

Pensions do not go dormant.  That only applies to bank accounts.   The pension remains invested and subject to daily valuation changes.

You have given us three options (you, your husband or savings).  However, you haven't given any details that allow us to understand your scenario and which of those may be best.   You can probably eliminate savings as that is the less tax efficient of the too and savings are generally not a good idea for long term retirement planning.    You paying something is a good idea.  However, if your spouse is a higher rate tax payer then it may be better for them.  There is also the potential for a lifetime ISA as an option.

Not an option - OP qualifies for state pension in 7 years.

Trommusic1

Thanks everyone. I didn't mean dormant, just currently non contributing. I've checked and NI contributions up to date so will receive a full state pension. My husband isn't a higher rate tax payer. I just wondered if I should pay into my pension anyway although I'm not earning. Thanks to your comments I will.

LHW99

Your husband can also give you money for your pension (or even pay in for you), if you do not have the £2880 spare.

It is worth planning together, as if he has all the pension provision, then as a couple you may miss out on using both personal tax allowances at retirement (will depend on whether the state pension becomes / stays higher than the tax allowance in future)

poseidon1

Trommusic1 said:

Thanks everyone. I didn't mean dormant, just currently non contributing. I've checked and NI contributions up to date so will receive a full state pension. My husband isn't a higher rate tax payer. I just wondered if I should pay into my pension anyway although I'm not earning. Thanks to your comments I will.

A bit morbid I know, but worthwhile your husband checking the extent of widows pension ( if any ) if he predeceases you whilst receiving his pension. 

If widow's pension provision  is not brilliant under his scheme/s, might make sense for him to concentrate on improving his pensions whilst he still has time to do so. As LHW99 points out pension planning should be a joint excercise between you both to achieve an optimum outcome for your joint retirement incomes.

In passing and on a separate issue I note you are carer for your daughter. Does she suffer from some form of permanent disability? If so, no doubt you and your husband are also thinking about the nature of  your necessary estate planning to ensure your daughters interests are taken care of when neither of you are around.