Retirement at 60, the plan:

magd36

Triumph13 said:

I always prefer to start at the position where both state pensions …

That’s really useful. Thanks.

Not sure what this means? “£9k DB (to get to your £15k total”. I have £15k DB after I’ve taken the lump sum.

We do have a child and have some health issues so wasn’t really looking at annuities.

Thanks

Dazed_and_C0nfused

magd36 said:

The tax wrapper and the investments in the tax wrapper are two different things.

You can hold deposits inside a 

Is she a shareholding director or have access to employer contributions that could be used to pay that?
If no, then you cannot use carry forward from previous years.

I understand the investment/tax wrapper however don’t understand the relevance to anything or don’t get the point you’re making. Sorry.

Regarding paying in unused pension allowance, I thought everyone could pay up to 100% of their salary going back 2 years. If her DB uses £4k she has £16k left from a £20k salary. Using previous 2 years she can invest £32k as a lump sum in a SIPP. If not why not?

Given you had got totally the wrong end of the stick to start with you might want to revisit these figures.

How much will your wife earn this tax year (her salary)?

How much do you expect her next P60 will show she has earned by 5 April 2026?  This is often less than her salary when in a DB pension scheme as they often use the net pay method for pension contributions i.e. salary £20,000 less say £2,000 net pay contributions = taxable pay £18,000.

magd36

Dazed_and_C0nfused said:

magd36 said:

The tax wrapper and the investments in the tax wrapper are two different things.

You can hold deposits inside a 

Is she a shareholding director or have access to employer contributions that could be used to pay that?
If no, then you cannot use carry forward from previous years.

I understand the investment/tax wrapper however don’t understand the relevance to anything or don’t get the point you’re making. Sorry.

Regarding paying in unused pension allowance, I thought everyone could pay up to 100% of their salary going back 2 years. If her DB uses £4k she has £16k left from a £20k salary. Using previous 2 years she can invest £32k as a lump sum in a SIPP. If not why not?

Given you had got totally the wrong end of the stick to start with you might want to revisit these figures.

How much will your wife earn this tax year (her salary)?

How much do you expect her next P60 will show she has earned by 5 April 2026?  This is often less than her salary when in a DB pension scheme as they often use the net pay method for pension contributions i.e. salary £20,000 less say £2,000 net pay contributions = taxable pay £18,000.

I got the fact you can’t carry forward previous year’s allowance if under 60k wrong. That’s all. In the overall plan it doesn’t make a significant difference and I might not even bother buying her a SIPP anyway.

It’s your comment about the overall investment/ tax wrapper I didn’t understand and why would it be better?

Triumph13

magd36 said:

Triumph13 said:

I always prefer to start at the position where both state pensions …

That’s really useful. Thanks.

Not sure what this means? “£9k DB (to get to your £15k total”. I have £15k DB after I’ve taken the lump sum.

We do have a child and have some health issues so wasn’t really looking at annuities.

Thanks

Ah, so your wife's £6k pa DB is on top of the things that you listed in your original post?  Does it come with automatic lump sum as well?

Dazed_and_C0nfused

magd36 said:

Dazed_and_C0nfused said:

magd36 said:

The tax wrapper and the investments in the tax wrapper are two different things.

You can hold deposits inside a 

Is she a shareholding director or have access to employer contributions that could be used to pay that?
If no, then you cannot use carry forward from previous years.

I understand the investment/tax wrapper however don’t understand the relevance to anything or don’t get the point you’re making. Sorry.

Regarding paying in unused pension allowance, I thought everyone could pay up to 100% of their salary going back 2 years. If her DB uses £4k she has £16k left from a £20k salary. Using previous 2 years she can invest £32k as a lump sum in a SIPP. If not why not?

Given you had got totally the wrong end of the stick to start with you might want to revisit these figures.

How much will your wife earn this tax year (her salary)?

How much do you expect her next P60 will show she has earned by 5 April 2026?  This is often less than her salary when in a DB pension scheme as they often use the net pay method for pension contributions i.e. salary £20,000 less say £2,000 net pay contributions = taxable pay £18,000.

I got the fact you can’t carry forward previous year’s allowance if under 60k wrong. That’s all. In the overall plan it doesn’t make a significant difference and I might not even bother buying her a SIPP anyway.

It’s your comment about the overall investment/ tax wrapper I didn’t understand and why would it be better?

No, unless you know what her taxable pay is (which is likely to be different to her earnings) you can't know how much you can add to a pension for her.

magd36

Dazed_and_C0nfused said:

magd36 said:

Dazed_and_C0nfused said:

magd36 said:

The tax wrapper and the investments in the tax wrapper are two different things.

You can hold deposits inside a 

Is she a shareholding director or have access to employer contributions that could be used to pay that?
If no, then you cannot use carry forward from previous years.

I understand the investment/tax wrapper however don’t understand the relevance to anything or don’t get the point you’re making. Sorry.

Regarding paying in unused pension allowance, I thought everyone could pay up to 100% of their salary going back 2 years. If her DB uses £4k she has £16k left from a £20k salary. Using previous 2 years she can invest £32k as a lump sum in a SIPP. If not why not?

Given you had got totally the wrong end of the stick to start with you might want to revisit these figures.

How much will your wife earn this tax year (her salary)?

How much do you expect her next P60 will show she has earned by 5 April 2026?  This is often less than her salary when in a DB pension scheme as they often use the net pay method for pension contributions i.e. salary £20,000 less say £2,000 net pay contributions = taxable pay £18,000.

I got the fact you can’t carry forward previous year’s allowance if under 60k wrong. That’s all. In the overall plan it doesn’t make a significant difference and I might not even bother buying her a SIPP anyway.

It’s your comment about the overall investment/ tax wrapper I didn’t understand and why would it be better?

No, unless you know what her taxable pay is (which is likely to be different to her earnings) you can't know how much you can add to a pension for her.

Let me make it clearer. I don’t want to add anything. Ignore that line in the OP.

magd36

Triumph13 said:

magd36 said:

Triumph13 said:

I always prefer to start at the position where both state pensions …

That’s really useful. Thanks.

Not sure what this means? “£9k DB (to get to your £15k total”. I have £15k DB after I’ve taken the lump sum.

We do have a child and have some health issues so wasn’t really looking at annuities.

Thanks

Ah, so your wife's £6k pa DB is on top of the things that you listed in your original post?  Does it come with automatic lump sum as well?

Yes. It comes with a lump sum of 9k min or more if willing to reduce the 6k. I didn’t mean to include her situation other than her SP. I think I misled everyone by mentioning the £36k SIPP idea which was a bit if a red herring. Sorry for the confusion.

squirrelpie

Does your plan provide for your wife if you die first?

DRS1

magd36 said:

Triumph13 said:

I always prefer to start at the position where both state pensions …

That’s really useful. Thanks.

Not sure what this means? “£9k DB (to get to your £15k total”. I have £15k DB after I’ve taken the lump sum.

We do have a child and have some health issues so wasn’t really looking at annuities.

Thanks

Health issues can be quite handy when looking at annuities.

But obviously annuities are no good if you are thinking of leaving something from the pension to the kid.

And given that you have two lots of DB pension you already have an annuity like income coming your way.

But there are different sorts of annuity including a fixed term annuity which could cover eg the period from retirement to SPA to give you that extra £20k or whatever pa.  And you can structure it so there is a lump sum payable at the end.

magd36

squirrelpie said:

Does your plan provide for your wife if you die first?

Yes 50% of my DB