Pension for my wife

Vsully

New Member
Messages
4
Probably a stupid question but wondering what if anything can be done please. We are a couple of 40 year olds. Mortgage is paid off. Have savings. Wife is staying home to rear kids. She has no pension. I have a pension with work and am paying the max for my age. Is there anything we can do for her pension with our savings? If no,does anyone have advice where to invest the savings as not all guaranteed by state.
 

jpd

Frequent Poster
Messages
1,734
If she is not working, then she can't get tax relief on payments into a pension fund. Under current pension rules, you will be able to claim a pension supplement on her behalf and she would be eligible for a widow's pension if you die before her. Your work pension may also have a widow pension option but you need to check this.

Otherwise, saving is another option but for that you need to get advice and be clear about your aims and risk tolerance
 

Vsully

New Member
Messages
4
If she is not working, then she can't get tax relief on payments into a pension fund. Under current pension rules, you will be able to claim a pension supplement on her behalf and she would be eligible for a widow's pension if you die before her. Your work pension may also have a widow pension option but you need to check this.

Otherwise, saving is another option but for that you need to get advice and be clear about your aims and risk tolerance
Thanks so much appreciate it
 

EmmDee

Registered User
Messages
226
I have just completed a detailed analysis of this very question


Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie
Hi - you post material to a site that isn't available when I click the link (and not a service I am familiar with - with an unfortunate name btw).

Do you have it posted anywhere else
 

abc_xyz

Registered User
Messages
31
Hi - you post material to a site that isn't available when I click the link (and not a service I am familiar with - with an unfortunate name btw).

Do you have it posted anywhere else
I can get to the linked to document - of which only the 2 page introduction is accessible. To view the full 40 page version a fee of €229.99 must be paid. So I doubt he has it available elsewhere.
 

SBarrett

Frequent Poster
Messages
3,177
Probably a stupid question but wondering what if anything can be done please. We are a couple of 40 year olds. Mortgage is paid off. Have savings. Wife is staying home to rear kids. She has no pension. I have a pension with work and am paying the max for my age. Is there anything we can do for her pension with our savings? If no,does anyone have advice where to invest the savings as not all guaranteed by state.
Tax relief under pensions is only available for "relevant earnings". As your wife doesn't have any, she can't get any tax relief on contributions. The question then is which is better:

  1. Put money into a pension with no tax relief, tax free growth, 25% lump sum but the rest is taxed as income; or
  2. Put it in an investment where only the growth is taxed at 41%
From a tax point of view, it is dependent on what tax bracket your wife's pension is in. If any benefits remain at the lower tax rate, it is cheaper to put it in a pension. But obviously she can't access the funds until she is 60 years of age.

I've been working as an advisor for over 20 years now and have never had a case where a client who was unable to claim tax relief put money into a pension. You are in a great position financially, no mortgage, surplus cash. Build it up and constantly assess where you are in relation to meeting your goals.

Steven
www.bluewaterfp.ie
 

Vsully

New Member
Messages
4
Tax relief under pensions is only available for "relevant earnings". As your wife doesn't have any, she can't get any tax relief on contributions. The question then is which is better:

  1. Put money into a pension with no tax relief, tax free growth, 25% lump sum but the rest is taxed as income; or
  2. Put it in an investment where only the growth is taxed at 41%
From a tax point of view, it is dependent on what tax bracket your wife's pension is in. If any benefits remain at the lower tax rate, it is cheaper to put it in a pension. But obviously she can't access the funds until she is 60 years of age.

I've been working as an advisor for over 20 years now and have never had a case where a client who was unable to claim tax relief put money into a pension. You are in a great position financially, no mortgage, surplus cash. Build it up and constantly assess where you are in relation to meeting your goals.

Steven
www.bluewaterfp.ie
Thanks Steven
 
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