Pension tips for couples
- Pay into your partner’s pension: If one partner is a higher earner and is approaching the Lifetime Allowance or Annual Allowance, they could pay additional contributions into their partner’s pension.
- Don’t forget the death benefits and inheritance tax benefits of pensions: Pensions won’t normally form part of the estate for inheritance tax purposes. In the instance of death before age 75, they can usually be paid out tax free (on death after 75, they are taxed as the beneficiary’s income). It can make sense to discuss when and how to access a pension and if it would be better to spend any other savings first.
- Avoid unnecessary large withdrawals from a pension fund: Couples should consider how much money they need to withdraw from their pension funds. Drawing too much too quickly can lead to large tax bills.
- Make sure your partner knows who to contact about your pensions if you die: You may have carefully arranged all your finances so that they can be passed to your loved ones in the most tax efficient way possible. However, if your partner hasn’t been part of the conversation, they may make uninformed decisions.
Getting specialist retirement advice
As well as talking to each other, it’s well worth talking to a financial adviser. This is especially true for people who plan to retire within the next five years.
At LV= we’ve been specialising in providing trusted and regulated retirement advice for over 20 years. Learn more about how our retirement advice service can help you plan for retirement and get your pensions ready for the retirement you want to enjoy. You can request a call back from one of our friendly advisers today.
*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in June 2021.
View the July 2021 Edition of the LV= Wealth and Wellbeing report