Side gig additional money

If you are both planning to retire early (i.e. before she hits NHS normal retirement age) it would make sense to have some personal pension in her name to make sure she can use her income tax personal allowance.

Any option to buy added years in the NHS scheme?

If you are early 30s then you should assume you will be unable to access your pensions until 58 (State Pension Age minus 10 years), potentially longer as another increase to SPA is more than possible. So as Phil says you should look at S&S ISAs although it may be less tax efficient than a pension, especially if she can get tax relief at 20% and later draw it out at 0% using the personal allowance.

Choosing S&S ISA over higher rate relief and salary sacrifice NI relief would very likely be bonkers.

If nothing changed until your retirement age (and the lifetime allowance wasn't a factor), it could easily make more sense to bridge the gap from your actual retirement age to 58 (or whatever) by borrowing money and repaying it from your pensions once you can access them than paying 40% tax plus NI to fund S&S ISAs.

Are you paying any higher rate tax? At the risk of stating the bleeding obvious, if you have not sacrificed away your entire higher rate liability, it may make more sense for you to sacrifice more of your own income into a pension and use her £6,000pa to fill the gap.

Does your employer pay in their 13.8% NI under your salary sacrifice arrangement? I'm assuming she won't get any NI relief, only income tax relief.

MaxiRobriguez wrote: »

I don't think there's any possibility of her buying additional years in the scheme, only making AVC's to what would essentially be a SIPP.

Have got a small provision (c.£20k) in S+S ISA currently. I know it's not enough but I'm currently sacrificing about 30% of my salary into my salary sacrifice scheme to take advantage of higher relief and then some and to benefit from tax relief at income rather than crystalisation. If/when this tax relief goes and I'm a bit older then I'll probably contribute more to the S+S ISA to bump that up in the years before retirement.

I think you can buy 'added pension' which is effectively the same sort of thing as added years. You would need to compare the benefit with say SIPP.
https://www.nhsbsa.nhs.uk/member-hub/increasing-your-pension/additional-pension
What about a S&S LISA, £4,000 will be grossed up to £5,000 same as a pension but, unlike a pension, no tax when you take it out at age 60.

IMO, for tax purposes when retiring early, it would make more sense for her to up her payments into a SIPP and you to pick up the slack on the household income now as long as you salary sac under HRT limit rather than you contribute more to your larger DC pot.

Her ability to withdraw £12.5k tax free yearly until her NHS pension can be taken without actuarial reduction to my mind trumps you having more in your pot. If you can both build up a substantial pot then being able to draw, using UFPLS, £16.6k each (£33.2k total) tax-free yearly until SP age, very advantageous.

Look at ISA's also but in reality, if you both have decent DC pots, the ISAs only need to last a few years before you can each access DC pensions so this could be a lower priority unless you have money left over.