Pensions

joc_

looking for some advice.
My husband (early 40's) starting working about two years ago in Co. Council, so he is paying pension there. Before he got this job, he was paying a private pension for about 5-6 years. Just wondering if this pension can be transferred to his current pension (apologies if this is daft q!!). We can't really afford to be paying the two pensions, if he stops paying the private pension, can we do anything with it?

thanks in advance,
j.

coylemj

He can stop paying the private pension and park the money. At his age I'd leave it in a managed fund which is geared towards equities (shares).

He probably wouldn't be able to move the private pension into the co. co. pension but what he might be able to do is sign up to make additional voluntary contributions (AVC), these accumulate as a pension fund separate from the occupational pension and he might be able to move his private pension fund into his AVC. People who start in a pensionable job in their 40s often sign up for an AVC, in order to supplement the occupational pension as they can't clock up the maxium 40 years service.

He should talk to someone in the union, I believe the Local Govt and Public Service Union (LGPSU) is now part of Forsa.

joc_

Thank you so much coylemj for taking the time to reply and for your very informative helpful reply.

j.

hmmm

There can be benefits to having multiple pensions, in particular they may give you flexibility as to when you retire. Don't rush into combining them.

coylemj

hmmm wrote: »

There can be benefits to having multiple pensions, in particular they may give you flexibility as to when you retire. Don't rush into combining them.

Might be an issue in different circumstances but the OP's husband only contributed to the private fund for 5-6 years. He won't be retiring on that pension!

hmmm

coylemj wrote: »

Might be an issue in different circumstances but the OP's husband only contributed to the private fund for 5-6 years. He won't be retiring on that pension!

True, but instead of locking it into the public sector pension which will only become available in his 60s, he may be able to use funds in the private pension to retire earlier.

bilbot79

My wife is on one of these public sector type pensions and there is talk of not letting folks pay more to exit early etc. I don't fully understand it.

What's the deal with private pensions outside of that. Will she be able to put 25% of her remaining salary into a seperate private pension?

Can she retire at 60 on the PP and wait to benefit from the public service one at 65?

Henry Ford III

coylemj wrote: »

He can stop paying the private pension and park the money. At his age I'd leave it in a managed fund which is geared towards equities (shares).

He probably wouldn't be able to move the private pension into the co. co. pension but what he might be able to do is sign up to make additional voluntary contributions (AVC), these accumulate as a pension fund separate from the occupational pension and he might be able to move his private pension fund into his AVC. People who start in a pensionable job in their 40s often sign up for an AVC, in order to supplement the occupational pension as they can't clock up the maxium 40 years service.

He should talk to someone in the union, I believe the Local Govt and Public Service Union (LGPSU) is now part of Forsa.

if there's only 1 employment (1 salary) and it's pensionable he MUST stop paying into a private arrangement.

Mrs OBumble

Henry Ford III wrote: »

if there's only 1 employment (1 salary) and it's pensionable he MUST stop paying into a private arrangement.

Why?

Heres Johnny

Mrs OBumble wrote: »

Why?

You pay into the pension where you are paying your tax. In this case occupational pension.
You can't claim tax relief for 1 employment in 2 different pension schemes

If he had another income, then both pensions could be paid into at the same time

Mrs OBumble

Heres Johnny wrote: »

You pay into the pension where you are paying your tax. In this case occupational pension.
You can't claim tax relief for 1 employment in 2 different pension schemes

Nonsense.

You can save wherever you want.

If you want tax relief associated with saving in a pension, then (provided the total contribution is less than the age-allowed amount), you can pay into as many eligible schemes as you want. It's easier to claim the tax relief if it's done where PAYE is deducted, but not required.

bilbot79

Mrs OBumble wrote: »

Nonsense.

You can save wherever you want.

If you want tax relief associated with saving in a pension, then (provided the total contribution is less than the age-allowed amount), you can pay into as many eligible schemes as you want. It's easier to claim the tax relief if it's done where PAYE is deducted, but not required.

If you're in one of these occupational 'final salary' pension schemes can you still get tax relief on a private pension?

The J Stands for Jay

Mrs OBumble wrote: »

Nonsense.

You can save wherever you want.

If you want tax relief associated with saving in a pension, then (provided the total contribution is less than the age-allowed amount), you can pay into as many eligible schemes as you want. It's easier to claim the tax relief if it's done where PAYE is deducted, but not required.

If the private pension is an RAC, there's no requirement to stop but there'll be no tax relief. If it's a prsa, then they can continue and get tax relief. If it's an occupational pension scheme from an earlier employment, employee contributions and AVCs have to stop.

The J Stands for Jay

bilbot79 wrote: »

If you're in one of these occupational 'final salary' pension schemes can you still get tax relief on a private pension?

Only if it's a PRSA AVC.

bilbot79

McGaggs wrote: »

Only if it's a PRSA AVC.

Must get my wife to start one.

Does anyone know if you invest more than the tax relief threshold into your pension do you still not have to pay capital gains tax?

The J Stands for Jay

bilbot79 wrote: »

Must get my wife to start one.

Does anyone know if you invest more than the tax relief threshold into your pension do you still not have to pay capital gains tax?

No CGT on pensions.

Henry Ford III

Mrs OBumble wrote: »

Why?

In the absence of salary the employment is non pensionable. This applies to occupational pensions only.

p.s. For the self employed there must be "relevant earnings". Anyone can pay into a PRSA but without tax relief it's probably not worth it.