What best to do....

OldBlade
OldBlade Posts: 25 Forumite
First Anniversary Combo Breaker
in Pensions, annuities & retirement planning
I am approaching retirement, 65 this year, but intend to defer my state pension and carry on working for bit.

I have a couple of small pensions separately and I also have approx 80K made up of 2 SIPPs and a small pension I am contributing to.

My wife also has a small pension but won't receive her state pension until 2022. She also has 80K in cash (savings and ISAs)

I'm looking for suggestions for what we might do with this 160K in terms of the most productive investment.

Many thanks for any ideas.
«13

Comments

  • xylophone
    xylophone Posts: 44,400 Forumite
    Name Dropper First Anniversary First Post
    You and your wife have both checked your state pension forecasts?

    https://www.gov.uk/check-state-pension
    I have a couple of small pensions separately and I also have approx 80K made up of 2 SIPPs and a small pension I am contributing to.

    Might it be worth considering consolidating your pensions into one plan?

    Have you considered an interview with Pension Wise for a discussion of your options?

    https://www.pensionwise.gov.uk/en

    Is your wife currently in receipt of a pension?

    Is she currently earning?
  • Mnd
    Mnd Posts: 1,699 Forumite
    First Anniversary Name Dropper First Post
    Consider paying into a pension for your wife
    No.79 save £12k in 2020. Total end May £11610
    Annual target £24000
  • OldBlade
    OldBlade Posts: 25 Forumite
    First Anniversary Combo Breaker
    Yes, we've checked our SP, I've got full and she has approx 90% or so.

    I have had an a moneywise interview and they offered the same, and very valid, suggestions as yourself.

    Combining my 3 pension pots is something I will end up doing, with a view to taking variable amounts from income drawdown, as and when required. My concern is that the pots themselves aren't gaining much and being eroded by charges.

    My wife's cash is of course not gaining much either and being eroded by inflation!
  • OldBlade
    OldBlade Posts: 25 Forumite
    First Anniversary Combo Breaker
    Paying into a pension for my wife? In what way?

    Sorry I don't understand.
  • xylophone
    xylophone Posts: 44,400 Forumite
    Name Dropper First Anniversary First Post
    My concern is that the pots themselves aren't gaining much and being eroded by charges.

    Cost comparison?

    https://forums.moneysavingexpert.com/showthread.php?t=5583030
    she has approx 90% or so.

    Is she no longer working or if working, not earning enough to pay NI or be credited with NI?

    Re voluntary contributions

    https://www.royallondon.com/global/documents/goodwithyourmoney/topping-up-your-state-pension-guide.pdf

    Even if your wife no longer has relevant earnings she can still contribute up to £2880 per annum to a pension and receive tax relief of £720.

    https://forums.moneysavingexpert.com/showthread.php?t=5580163
  • Albermarle
    Albermarle Posts: 22,130 Forumite
    First Anniversary First Post Name Dropper
    Paying into a pension for my wife? In what way?

    Sorry I don't understand.

    You would give her the money to pay into her own pension . The reason is that she can gain tax relief on pension contributions up to a certain point ( see previous post ) even if she is not earning/paying any tax .
    Alternatively she could pay into her own pension herself from the £80K savings.
    As she will only contribute for a few years any new pension is best invested in lower ( but not zero risk) funds .
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    Is your wife earning at the moment?
    Free the dunston one next time too.
  • OldBlade
    OldBlade Posts: 25 Forumite
    First Anniversary Combo Breaker
    She isn't employed but has a small income from an annuity.

    If she were to start a new pension to pay into, then she would get tax relief which would be cancelled out by the tax she would pay when taking the pension? So the benefit would be that she should get better growth than the cash ISAs etc she is getting now?
  • OldBlade
    OldBlade Posts: 25 Forumite
    First Anniversary Combo Breaker
    If I could find low risk funds (as opposed to 0 risk) but with some growth more than cash I would be happy. None of my Fidelity, Virgin or Aviva funds seem to provide growth!
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    OldBlade wrote: »
    She isn't employed but has a small income from an annuity.

    If she were to start a new pension to pay into, then she would get tax relief which would be cancelled out by the tax she would pay when taking the pension? So the benefit would be that she should get better growth than the cash ISAs etc she is getting now?

    She pays £2,880 into (say) a SIPP. The taxpayer, ever bountiful, adds £720. She then draws out most of the £3,600, leaving just enough behind to avoid any charge for early closure. She repeats each tax year. Unless her "small" annuity is bigger than "small" implies to me, she'd get that whole £3600 (or suitable lesser sum) tax-free.

    She could carry on until she takes State Pension. After that, if her state pension plus annuity exhaust her Personal Allowance, her gain from this game will decline from £720 p.a. to £180 p.a.

    Also, she might exploit the marriage allowance.
    https://www.gov.uk/marriage-allowance
    Free the dunston one next time too.
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