two pensions - civil service & private - illegal ?

[tvcabinet]

my wife has a private pension for circa 12 years taken out when in private sector employment - she joined civil service 5 years ago & is contributing to a pension scheme there as well - a revenue official today told me that my wife having the two pensions was 'not legal' ! we are shocked - never heard this before - is it true ? and if so what should she do now ?

 

[LDFerguson]

If she has only the one source of income, she can only claim tax relief on her Civil Service superannuation contributions, but it's legal for her to make contributions to both. I'm assuming that the private one is a Personal Pension.

However, it would be more tax-efficient for her to cease contributions to the Personal Pension and look at buying back years in the superannuation scheme or making Addtional Voluntary Contributions (AVCs) with the money, as she can claim tax relief on such contributions.

 

[S.L.F]

Thanks for that - appreciate your help - what should she do with the personal pension fund - just freeze it or can it be transferred to civil service pension ? also this pp has a life insurance policy tacked on to it - can she continue paying the life policy if she freezes the pp?

 

[LDFerguson]

what should she do with the personal pension fund - just freeze it or can it be transferred to civil service pension ?

You'd need to get details of the ongoing charges on the Personal Pension if she makes it paid-up, as well as details of the fund(s) in which the policy invests. Then you'll be in a position to make a comparison with the alternatives.

also this pp has a life insurance policy tacked on to it - can she continue paying the life policy if she freezes the pp?

Is the life assurance cover a separate term assurance policy (completely separate fixed cost) or paid for by unit deduction? The former can be continued but the latter cannot. If you don't know, ask the Personal Pension company. Ask them also if there is a "continuation option" on the life cover - this allows you to convert the life assurance cover into a separate policy. But before availing of this option, you need to check if the cost is reasonable or would you simply be better off starting a new life assurance policy elsewhere.