# Pension for stay-at-home spouse



## Minnow2 (19 Dec 2017)

Hi
If a couple has only one income, is there a way to share the tax free allowance for pension contributions between them?

In my case, I am working while my spouse is a stay at home mum. I am concerned on her behalf that her pension pot is stagnant while I can continue to contribute fully to my employers scheme plus ACVs up to my tax-free allowance level.

I would like to be able to contribute equally for both of us. Is there any way to do this?


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## shweeney (19 Dec 2017)

I don't know about the tax break for a private pension, but I do know that years spent looking after kids are disregarded when working out the contributory pension. If she's in receipt of child benefit then the years up to the youngest child turning 14(?) are ignored when figuring out her average contributions.


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## LDFerguson (19 Dec 2017)

If she has no earned income in her own name, then she cannot claim tax relief on pension contributions.  If she intends to return to paid employment in the future, she can make contributions to a PRSA now and "store up" the tax relief, claiming it back when she has earned income in the future.


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## Conan (19 Dec 2017)

Assuming your wife has no earned income in her own right, then if she did contribute to a “private pension” she has no income against which to offset the pension contributions - so no tax relief, so no point.
If you are the one with the earned income then only you can claim relief on pension contributions.
No, you cannot share the tax relief for pension contributions.


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## shweeney (19 Dec 2017)

swings and roundabouts though really - if you were each earning 40K, and are entitled to 25% relief (if say you're in your 40s) then you could each put 10K into your respective pensions tax free. If you're earning 80K as a single earner then you can still put the same 20K into your pension - I'm not sure what your looking for, you want to be able to put 50% into it? Or you want to be able to contribute into her scheme? She's entitled to half of yours anyway.


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## Minnow2 (21 Dec 2017)

Thanks for the responses.



LDFerguson said:


> If she intends to return to paid employment in the future, she can make contributions to a PRSA now and "store up" the tax relief, claiming it back when she has earned income in the future.



She does intend to return to paid employment. I wasn't aware of this option and will look into it further.



shweeney said:


> Or you want to be able to contribute into her scheme? She's entitled to half of yours anyway.



The background of my question was to ensure that we have a fair split between us in terms of pension entitlements, and not that my wife would be unfairly penalised for taking time out of work. What do you mean by my wife being entitled to half my pension? If I was to die, surely the pension stops paying out?


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## jpd (21 Dec 2017)

Minnow2 said:


> If I was to die, surely the pension stops paying out?



That depends on the type and rules of the pension scheme.


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## huskerdu (21 Dec 2017)

If you are in a DC scheme, you can choose what sort of annuity to buy when you retire and you can choose one that pays out while she is alive as well. You can only really make that decision then, based on all your circumstances at the time.

Your wife should read up on the rules about the state pension and make sure she is protecting her entitlements. 

http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html


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## JoeRoberts (4 Jan 2018)

This is an area that urgently needs to be addressed. My wife gave up work to look after kids. And therefore her PRSA ceased. No point in contributing to it without tax relief as it will be taxed at withdrawal.
I would like for her to continue to build a fund in her own name. It is not the same thing as me increasing my own contributions so that the combined pot would be the same. She needs something in *her* name. Surprised that this issue has not been looked at yet. I want to be able to put money into her PRSA but get the tax relief. Or else put it in and let her withdraw without paying tax.


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## LDFerguson (9 Jan 2018)

JoeRoberts said:


> My wife gave up work to look after kids. And therefore her PRSA ceased. No point in contributing to it without tax relief as it will be taxed at withdrawal.



If she intends to return to paid employment in the future you can still contribute to her PRSA and claim the tax relief when she has taxable income to offset it against.



JoeRoberts said:


> I would like for her to continue to build a fund in her own name. It is not the same thing as me increasing my own contributions so that the combined pot would be the same. She needs something in *her* name.



Why does it have to be in her name? 



JoeRoberts said:


> Or else put it in and let her withdraw without paying tax.



Would that not just be a simple savings plan?  No tax relief on contributions and only taxed on growth on withdrawals.


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## JoeRoberts (9 Jan 2018)

LDFerguson said:


> If she intends to return to paid employment in the future you can still contribute to her PRSA and claim the tax relief when she has taxable income to offset it against.



Sure, but would not risk that.



LDFerguson said:


> Why does it have to be in her name? .



This is a subtle point but people like things in their own name - independence, their own money.



LDFerguson said:


> Would that not just be a simple savings plan?  No tax relief on contributions and only taxed on growth on withdrawals.



.. So why sell pensions to anyone then ?? Just give them a savings plan. And she would like to think she "has a pension"


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## Gordon Gekko (9 Jan 2018)

JoeRoberts said:


> This is a subtle point but people like things in their own name - independence, their own money



And with the greatest respect, it’s a red herring of a point.

There is no need to legislate for wooly concepts such as “the sense of having one’s own money”.


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## LDFerguson (11 Jan 2018)

JoeRoberts said:


> This is a subtle point but people like things in their own name - independence, their own money.



I'm inclined to agree with Gordon Gecko here.  The private pension system in this country is based on a fundamental principle that if you are earning and paying tax, then you can reduce the amount of tax you pay by putting money aside for your retirement into a pension plan.  If you are not earning and paying tax, then you have no tax bill to reduce.  I don't see why the government should go to the trouble of introducing new legislation just so that non-earners can have the nice fuzzy feeling of having their name appearing on a pension plan.  

At the moment, it appears from your post that you earn the money in your household.  I assume that you and your wife have figured out a way of distributing your income so that shared household expenses are paid, you have something for beer and skittles for yourself and so does she.  In retirement it would be no different.   

If you and your wife were to split up, there are plenty of legal ways of dividing up pension plans, so the name on the pension plan won't have any bearing on ownership in that scenario.



JoeRoberts said:


> So why sell pensions to anyone then ?? Just give them a savings plan. And she would like to think she "has a pension"



If a person has earned income and is paying tax, there can be a significant tax saving to encourage them to put money into a pension plan.  This is particularly efficient if the person is likely to be paying tax at a lower rate in retirement than they are now (or be tax exempt).  But as I said above, the pensions system operates on the principle of offering a tax saving as an incentive.  If you are not paying tax, then in most cases, a pension contribution is not suitable and a simple savings plan is preferable.


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## LDFerguson (11 Jan 2018)

Edit to remove duplicate post.


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