What to do

[Gary C]

My wife and I had a retirement plan

I have just taken my final salary pension and still getting paid full time
The wife is in a local Gov CARE scheme and plan was for both of us to go to three days per week for about 3 years then both retire

The council have rejected her request so I am thinking

Pay from my pension, £2.5K a month in AVC's into her pension, both of us to remain full time for another 12 months then tell them where to stick it.

I have though about reopening a pension at work as that would be more tax efficient and giving the outcome to her but no idea what that would net in such a short time and if I die then what she would get.

We are really annoyed that the request has been turned down as it was based on health reasons (very high blood pressure, though now being medicated)

and for every question like this, we all know PH has the answers

I wonder if my plan is the best or if anyone has suggestions (apart from buying 30,000 euromillions tickets)

[Cats_pyjamas]

Let her hand in her notice and pick up a stress free job 3 days a week. It's not worth her health.

[Gary C]

crossed our mind

anyone challenged a refusal ?

They are already in breach by exceeding the 2 months permitted but they will probably just lie in a tribunal.

She could just be sick for 6 months on full pay

[interstellar]

Surely it’s worth challenging, they will soon realise if the don’t agree she will probably leave.

[Gary C]

Appeal going in, full time rep to be engaged for tribunal (as they have breached the legislation) but I bet it will go nowhere

It was more about, I can give her my pension. What would be the best way of maximising the outcome for her 'pension'

Thinking, AVC are taken before tax ? So if she puts in near 100% in AVC's then takes the same amount in my pension, that should help and be the best way from a tax perspective ? Or should I put it into an ISA (can't see that being better)

Anything else out there ?

[xeny]

interstellar said:

Surely it s worth challenging, they will soon realise if the don t agree she will probably leave.

They may be trying to avoid the management overhead of part time staff and her leaving is their preferred outcome

[xeny]

Gary C said:

Pay from my pension, £2.5K a month in AVC's into her pension, both of us to remain full time for another 12 months then tell them where to stick it.)

How does this leave you WRT tax rates? You paying 40% marginal tax if she is on a 20% marginal rate for example would be unhelpful.

[Scootersp]

Gary C said:

We are really annoyed that the request has been turned down as it was based on health reasons (very high blood pressure, though now being medicated)

Very high 150 or 170 first number region? Is she otherwise fit and healthy within reason, I get the focus on time and money calculations etc for retirement, but we can underestimate the passage of time and stress and its effect on increasing the chances of health issues.

What is your wifes preference, in this instance and time of life/career and given the above, I'd being doing what would make her most calm/happy/content, if that's fighting it and 'sticking it to them' fine, if not then leave or if she has been there for so long she is sort of as nervous of the thought of work then perhaps look at ways to make the day to day better, or take the odd sick day, take the foot off the pedal (I'm not really into the sort fo long term sick route if not actually ill however they may or may not have treated her)

All I'm saying for balance is the health side might be more of a focus than the last push for the comfortable planned retirement?

[Gary C]

Scootersp said:

Very high 150 or 170 first number region? Is she otherwise fit and healthy within reason, I get the focus on time and money calculations etc for retirement, but we can underestimate the passage of time and stress and its effect on increasing the chances of health issues.

What is your wifes preference, in this instance and time of life/career and given the above, I'd being doing what would make her most calm/happy/content, if that's fighting it and 'sticking it to them' fine, if not then leave or if she has been there for so long she is sort of as nervous of the thought of work then perhaps look at ways to make the day to day better, or take the odd sick day, take the foot off the pedal (I'm not really into the sort fo long term sick route if not actually ill however they may or may not have treated her)

All I'm saying for balance is the health side might be more of a focus than the last push for the comfortable planned retirement?

Your right

It was up at 220-230 but has come down with medication. I get what you are saying but she isn't the nervous type and wants to achieve the target however it maybe better just to stick it.
We will discuss that.

[ThingsBehindTheSun]

Cats_pyjamas said:

Let her hand in her notice and pick up a stress free job 3 days a week. It's not worth her health.

Do such things even exist anymore? From my experience companies want their pound of flesh no matter what you are doing. I watch the people in Tesco going around making up the online orders, even that seems stressful.

[Gary C]

xeny said:

Gary C said:

Pay from my pension, £2.5K a month in AVC's into her pension, both of us to remain full time for another 12 months then tell them where to stick it.)

How does this leave you WRT tax rates? You paying 40% marginal tax if she is on a 20% marginal rate for example would be unhelpful.

Not sure it would make any difference to me

I am getting my full salary and a pension. The pension is being taxed at 40% but that doesn't matter as I have no pension pot and its paid for life regardless (its an old nationalised industry final salary scheme)

I can give her all the money into our joint account to compensate for her increasing her AVC's upto 90% of her salary I think and that would be the most tax efficient way I think ?

[xeny]

Gary C said:

Not sure it would make any difference to me

I am getting my full salary and a pension. The pension is being taxed at 40% but that doesn't matter as I have no pension pot and its paid for life regardless (its an old nationalised industry final salary scheme)

I can give her all the money into our joint account to compensate for her increasing her AVC's upto 90% of her salary I think and that would be the most tax efficient way I think ?

As it's a DB scheme, do you meet the critera to continue making pension contributions without running into recyclng rules?

In which case it is a matter of which of you is on the higher marginal rate?

[Gary C]

xeny said:

As it's a DB scheme, do you meet the critera to continue making pension contributions without running into recyclng rules?

In which case it is a matter of which of you is on the higher marginal rate?

I was thinking She would make the increased pension payments on AVC's out of her salary, I would just let her spend my pension by increasing my direct debit to the joint account make up what she has lost. I dont think that would change anything from a tax perspective ?

I was thinking about joining the new company pension (which is no longer a DB scheme) but wasn't aware of 'recycling rules'. Will look at that but probably won't do it as not sure what would happen if I was to die.

Mind you, if I die, she gets a £35K PA pension from my scheme so that's possibly not a problem (though it would be for me !)

Edited by Gary C on Tuesday 8th July 14:56

[Gary C]

xeny said:

interstellar said:

Surely it s worth challenging, they will soon realise if the don t agree she will probably leave.

They may be trying to avoid the management overhead of part time staff and her leaving is their preferred outcome

One thing is for certain, they cannot afford to loose any more Child Protection Social Workers, especially the one with the highest output in the group but of course they might want full time head count.

[xeny]

Gary C said:

I was thinking She would make the increased pension payments on AVC's out of her salary, I would just let her spend my pension by increasing my direct debit to the joint account make up what she has lost. I dont think that would change anything from a tax perspective ?

Very simplistically,

If you are paying 40% tax and she isn't, then it seems as if it would bias things towards you making pension contributions, as you'd potentially save 40% tax on the payments.

If you're both 40% tax payers, then makes little difference (at which point my inclination would be to pay into whichever of you has less pension), unless one of you is less likely to pay 40% tax in retirement, in which case money should end up in their pension?

[Gary C]

xeny said:

Very simplistically,

If you are paying 40% tax and she isn't, then it seems as if it would bias things towards you making pension contributions, as you'd potentially save 40% tax on the payments.

If you're both 40% tax payers, then makes little difference (at which point my inclination would be to pay into whichever of you has less pension), unless one of you is less likely to pay 40% tax in retirement, in which case money should end up in their pension?

Ah, I see what you mean, yes it would be more efficient for me to open a new pension and pay into it.

[Gary C]

So i can actually enter the company DC pension

If I put £850 a month in, it will only cost me £500 in take home and will put £2587 a month into the scheme with the company contribution ! Then also get the wife to increase AVC's so that her pension increases too. After a year I would have £31K in the scheme which can be drawn down though at 40% which does somewhat take a bite out of it, but with employer contributions, its free money.

Of course I would not be able to take out 25% tax free as that allowance has already been maxed out (it applies per person to all schemes I take it ?)

I know its a real first world problem, but I want her to have her independence when it comes to money as its important to her.

I intended to use my pension to allow me to work three days a week too but not going to if she hasn't got it.

[Armitage.Shanks]

Have you worked out how much money you both actually need in retirement to have the lifestyle you want? It sounds like you're scrambling for every last penny and, like most PHers that contribute to these threads will have more than enough and die with plenty unspent. If you like work on a 3-day week basis fare enough but that brings inflexibility of time off for short last minute getaways etc.

You'll never get the years back and if you can do stuff now whilst you're both fit and able I'd think about pulling the pin. I'm also on a FS index linked pension so it's never going to run out and as soon as I could take it I 'retired' at 53. Even now at 61 I've got more money coming in than going out so my various investments are hardly being touched. Then the Govt is going to drop us another £20k+ at SP age!

Whilst I'm still relatively fit, I'm not as fit as I was at 53 and I can't see it improving before some age type ailment comes along that will no doubt push annual travel insurance into 4-figures and put other restrictions on me. So if you've got stuff you want to do, do it now, don't lose the opportunity.