Married woman-what happens when husband retires?

jennifernil

My husband will be retiring ( at 65 ) in 2 years time, I will then be 58. I have never worked so have made no NI contributions. He will have a Company Pension plus State Pension. Several questions......
1. Does he get the married couple state pension even though I am not 60?
2. Will anything change once I am 60? e.g. will I get any pension and he loose some?
3. If so how much would this be and how might this affect our tax situation?
At present I am a non taxpayer so our modest savings are in my name and interest paid gross.
All advice gratefully received. Thanks!

mrbnewc

Hi J

When your husband is 65 he will be able to claim an Adult Dependancy Increase for you, as long as you don't a weekly income of more than £56.20. The rate he can receive for you depends on the amount of his Basic State Pension. Lets say for example that your husband has the full Basic of £82.05, he would be able to claim an extra £49.15 for you. The ADI increase is taxable, so your husband would need to declare it to the Inland Revenue, as he is liable to pay the tax on it, not you.

Once you reach 60, your husband would lose the ADI increase for you and if you have less than 60% Basic State Pension, you would be given a top up up to the 60% (which is actually the same as the ADI rate of £49.15). So basically you would not be better or worse off, and the money would just be paid to you rather than your husband. Obviously, as the benefit is then paid to you, you would take on the tax liability and your husband would lose it.

Hope this makes sense, any questions just ask.

Cheers :j

jennifernil

Thanks for that information. The only "income" I have is the interest on our savings, will this be taken into account when working out how much extra he will receive in the ADI?

jennifernil

Also, once I reach 60 and this amount is paid to me, if it plus the savings interest is still less than my tax allowance, would I be correct in thinking I would not be taxed on it?

mrbnewc

J

Interest from savings does not count as earnings for ADI purposes :j, so your husband would be able to claim the full increase for you.

If your total State Pension income and the interest from your savings does not bring you over your tax allowance, then you should not be liable for tax. I am not a tax expert, but this is what i think - might be worth checking it with the Inland Revenue.

:beer:

madasahatter_2

Yes...you are correct! I am in the same position and have juggled our savings around to make sure we pay the least tax possible.